WOW! to sell service areas to Atlantic Broadband, Astound Broadband
Cable MSO WOW! Internet, Cable & Phone (NYSE: WOW) says it has signed a pair of agreements that will see it sell five of its service areas. Its Cleveland and Columbus, OH, service areas will go to Atlantic Broadband, the U.S. subsidiary of Cogeco Communications Inc. (TSE: CCA), and WOW!’s Chicago, Evansville, IN, and Anne Arundel, MD, service areas will become the property of Astound Broadband (dba RCN, Grande Communications, and Wave Broadband). WOW! will receive $1.125 billion from Atlantic Broadband and $661 million from Astound, or a total of approximately $1.786 billion.
The two deals are expected to close in the second half of this year, subject to certain regulatory reviews and approvals and the satisfaction of other customary closing conditions. WOW! says it decided to sell the service areas to enable debt relief as well as “further pursue edge-outs and greenfield and commercial opportunities as part of its broadband-first strategy.” WOW! expects its leverage ratio to be 2.5X upon close, versus the 5.0X as of March 31, 2021, driven by lower net debt.
"We are pleased to reach these two agreements as WOW! takes a significant step toward accelerating our broadband-first growth strategy at a pivotal time in our industry," explained WOW! CEO Teresa Elder. "The substantial proceeds from these transactions reflect the attractiveness of our assets and the clear opportunity to expand our position as a trusted provider of reliable, accessible, and fast broadband solutions. The divestiture of these markets will enable us to reduce our debt as we continue to execute our broadband-first strategy, including pursuing our edge-out and greenfield strategies and expanding our commercial services."
The sales will leave WOW! with customers in 14 service areas in Alabama, Florida, Georgia, Michigan, South Carolina, and Tennessee. On a pro forma basis as of March 31, 2021, the company would have had approximately 532,000 total subscribers and 506,000 high-speed data revenue generating units. Homes passed would have been 1.9 million, with a subscriber penetration rate of 29%, better than the 26% pre-sale.
The WOW! Ohio broadband all-HFC systems pass approximately 688,000 homes and businesses total and serve approximately 196,000 internet, 61,000 video, and 35,000 telephony customers, as of March 31, 2021, estimates Cogeco. Astound estimates the assets it will acquire serve approximately 128,000 residential and business customers, with more than 700,000 homes passed and 5,700 miles of plant. Astound already has a footprint in Chicago adjacent to the assets it has agreed to buy. The Maryland assets are also close to Astound’s Washington, DC, service area.
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Stephen Hardy | Editorial Director and Associate Publisher, Lightwave
Stephen Hardy is editorial director and associate publisher of Lightwave and Broadband Technology Report, part of the Lighting & Technology Group at Endeavor Business Media. Stephen is responsible for establishing and executing editorial strategy across the both brands’ websites, email newsletters, events, and other information products. He has covered the fiber-optics space for more than 20 years, and communications and technology for more than 35 years. During his tenure, Lightwave has received awards from Folio: and the American Society of Business Press Editors (ASBPE) for editorial excellence. Prior to joining Lightwave in 1997, Stephen worked for Telecommunications magazine and the Journal of Electronic Defense.
Stephen has moderated panels at numerous events, including the Optica Executive Forum, ECOC, and SCTE Cable-Tec Expo. He also is program director for the Lightwave Innovation Reviews and the Diamond Technology Reviews.
He has written numerous articles in all aspects of optical communications and fiber-optic networks, including fiber to the home (FTTH), PON, optical components, DWDM, fiber cables, packet optical transport, optical transceivers, lasers, fiber optic testing, and more.
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