About two months after saying it was pursuing the creation of a new joint venture to build out fiber networks within and adjacent to its existing footprint, Cable One officially unveiled the effort -- Clearview Fiber -- adding that it has signed on investment firms GTCR, Stephens Capital and The Pritzker Organization as financing partners for the JV.

Cable One said it was pursuing the JV -- which includes its Clearwave Communications fiber assets and certain fiber assets of Hargray Communications -- in November. In a Securities and Exchange Commission filing at the time, Cable One said the JV also included certain unaffiliated third-party investors, but declined to name them.

According to a press release January 3, Cable One said the Clearwave Fiber venture is committed to “provide fast and reliable connectivity via FTTP [fiber-to-the-premises] internet to underserved markets and will allow for more rapid expansion of fiber internet to homes and businesses in small cities and big towns.”

Cable One owns a majority of the JV, and said investors will make “substantial cash investments” to support its expansion. Clearwave Fiber will be led by executive chairman Michael Gottdenker and CEO David Armistead, both of whom were part of Hargray’s executive leadership team from 2007 until its 2021 sale to Cable One.  

“This strategic investment will help accelerate the deployment of fiber-based broadband services to a range of markets, including underserved areas of the country,” Gottdenker said in a press release. “Our team is motivated by our shared core values of customer service and improving lives through connectivity and is excited to bring fast and reliable Clearwave Fiber broadband to homes and businesses across the country. We are thrilled to welcome GTCR, Stephens, and TPO to the Clearwave Fiber family and look forward to our continued partnership with Cable One.”

GTCR has been a long-time investor in the cable space and has been a frequent partner of Cable One in various deals. In 2019 it purchased Vyve Broadband with Mega Broadband Investments, selling a 45% interest in the company to Cable One about a year later for $547.1 million.  GTCR formed Rural Broadband Investments in 2013, buying several small cable operators -- including New Wave Communications  -- and was sold to Cable One in 2017. 

Pritzker and Stephens Capital were investors in Hargray, which Cable One bought in 2021. 

Cable One did not quantify how large the investment in Clearwave Fiber will be, but said its own contributions to the JV represent about 3% of its consolidated revenue in Q3 2021.  According to its financial statements, Cable One had Q3 total revenue of $430.2 million, meaning its investment in the Clearwave JV is about $13 million.

“We look forward to supporting and sharing in Clearwave Fiber’s growth over the coming years while remaining focused on our primary business, increasing penetration rates, integrating recently acquired companies and driving higher margins and greater free cash flow,” Cable One CEO Julie Laulis said in a press release. “We did not take lightly our choice of partners in this transaction and are excited to be working with like-minded individuals who share our core principles.”

Bank Street Group acted as lead financial advisor to Cable One, and Ernst & Young advised on the financial and operational carve-out of Clearwave Fiber. Cravath, Swaine & Moore LLP and Cahill Gordon & Reindel LLP acted as legal advisors to Cable One. Kirkland & Ellis LLP, Davis Polk & Wardwell LLP and Covington & Burling LLP acted as legal advisors to the investors on this transaction. ■

Cable One said it is contributing fiber assets from two company units — Clearwave Communications and Hargray Acquisitions Holdings — in a joint venture that will be financed in part by unaffiliated third parties that may accelerate the fiber rollout in portions of its footprint.

According to a document filed with the Securities and Exchange Commission on Nov. 3, Cable One said the fiber assets contributed to the JV represent about 3% of its consolidated revenue for the second quarter ended June 30. The company said the JV is “intended to accelerate deployment of fiber internet to residents and businesses in the relevant markets, as well as to provide connectivity to unserved and underserved areas in such markets.”

Cable One purchased Clearwave Communications, a facilities-based service provider with a fiber network in Southern Illinois, in 2018. It bought the remaining 85% interest in Hargray it didn't already own in May for about $2.2 billion. Unnamed unaffiliated third parties would contribute cash to the JV, Cable One said.  

While terms of the JV are still subject to negotiation and none of the parties have entered into any definitive agreements, some analysts are cheering the arrangement as it is expected to speed Cable One's fiber deployment. 

In a research note Thursday, Wells Fargo Securities media analyst Steven Cahall wrote that the JV would allow the company to deploy fiber in parts of its footprint “in a more capital-efficient way.”

Cable One has been aggressively building out its fiber network over the past few years, and has spent millions of dollars so far in 2021 pushing fiber into rural communities like Natchez, Mississippi and Vidalia, Louisiana; Victoria, Texas; Rio Rancho, New Mexico; and Belle Chasse, Louisiana.

Cable One said it has completed the purchase of the remaining 85% interest in Hargray Communications it didn’t already own, adding about 14 communities in four Southern states to its portfolio.

Cable One agreed to the deal, valued at about $2.2 billion, in February. The transaction built on an earlier deal where Cable One swapped its system in Anniston, Alabama for a 15% stake in the cable and telecom operator. 

According to Cable One, Hargray has about 125,000 residential and business customers in 14 markets across Alabama, Florida, Georgia and South Carolina and offers 1-Gigabit-per-second-capable services to about 99% of its customer base, In keeping with Cable One’s focus on broadband, the company said that about 60% of Hargray’s total revenues for the 12-month period ended Dec. 31 were derived from residential data and business services customers.

“We look forward to expanding our footprint into high-quality markets in Florida, Georgia and South Carolina, as well as reentering the Alabama market,” Cable One CEO Julie Laulis said in a press release. “The Hargray team has built a reputation of providing superior service and customer support to residential and business customers in these areas and we are excited to further build upon that legacy. I am thrilled to welcome our new Hargray associates to Cable One as we work together toward our shared focus of connecting customers and communities to what matters most.”

The deal is the sixth purchase for Cable One since 2017, when it bought NewWave Communications for $735 million. 

“It has been my privilege to serve as CEO of Hargray for the last 14 years as we have pursued our purpose of empowering people and communities to connect and thrive,” Hargray chairman and CEO Michael Gottdenker in a press release. “I am confident that under Cable One’s ownership we will continue to pursue this purpose for our colleagues, customers and the communities we serve.”

Cable One has agreed to buy the remaining 85% interest in Hargray Communications it didn’t already own in a transaction that values the company at about $2.2 billion.  

Cable One, based in Phoenix, swapped its Anniston, Alabama, system to Hargray for a 15% interest in the company in October. With the most recent deal, Cable One will own 100% of Hargray, contributing a mix of cash, equity and debt financing for the remaining 85%. The deal is expected to be completed in the second quarter. 

Publicly traded Cable One said the deal will give it an expanded presence in the Southeastern market — Hargray operates in 14 locations across Alabama, Florida, Georgia and South Carolina — and allows it to tap into Hargray’s fiber expertise. 

“This transaction will also serve as a potential platform for future organic and inorganic growth in the region as we look to continue to expand our footprint,” Cable One CEO Julie Laulis said in a press release. Cable One said Hargray generated about $128 million in earnings before interest, taxes, depreciation and amortization (EBITDA, a measure of cash flow) on an annualized basis in Q4 and it expects to realize about $45 million in annual run-rate synergies within three years of the close of the deal. 

The purchase price represents a robust multiple of about 17.2 times Hargrave’s annualized EBITDA, and 12.7 times cash flow assuming the synergies are realized immediately. Recent deals, like TPG’s sale of Astound Broadband to Stonepeak Infrastructure Partners, were valued in the 14 times range. 

Cable One will fund the purchase with a combination of cash, debt and issuing new equity. The company said it has received a $900 million bridge loan from J.P. Morgan and Credit Suisse to finance a portion of the deal. 

Cable One has been an aggressive buyer of properties over the past few years. In October, it said it would buy a 45% interest in Mega Broadband Investments, parent of Vyve Broadband, for about $547.1 million. The most recent deal would be its sixth transaction since 2017, when it purchased New Wave Communications for $725 million

Just four months after finalizing a deal to take a minority equity stake in cable operator Hargray Communications, Cable One said it will buy the remaining interest in the company in a transaction that values the operator at $2.2 billion. 

In October, Cable One closed a deal where it swapped its systems in Anniston, Alabama for a 15% equity stake in Hargray. The most recent deal, a mix of cash, equity and debt financing, is expected to be completed by the second quarter. In a press release, Cable One said the deal will give it an expanded presence in the Southeastern market -- Hargray operates in 14 locations across Alabama, Florida, Georgia and South Carolina -- and allows it to tap into Hargray’s fiber expertise.  

“We look forward to further partnering with Hargray to extend our presence in the Southeast through Hargray’s fast-growing markets, like-minded strategy, and commitment to providing fast and reliable internet service to rural markets,” Cable One CEO Julie Laulis said in a press release. “This transaction will also serve as a potential platform for future organic and inorganic growth in the region as we look to continue to expand our footprint.”

According to Cable One, Hargray generated about $128 million in annualized Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA, a measure of cash flow) on an annualized basis for the quarter ended Dec. 31. Cable One said it expects to realize about $45 million in annual run-rate synergies within three years of the close of the deal. 

Cable One has been an aggressive buyer of properties over the past few years. In October it said it would buy Mega Broadband Investments, parent of Vyve Broadband, for about $547.1 million.  The most recent deal would be its sixth transaction since 2017, when it purchased New Wave Communications for $735 million.  

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“Cable One and Hargray have remarkably similar cultures, starting with each company’s focus on delighting its customers," said Hargray chairman and CEO Michael Gottdenker in a press release. "Having led Hargray for nearly 14 years, and having gotten to know Cable One well over the past few years, I am excited about this transaction and am confident that our colleagues, customers, and communities will continue to thrive under Cable One’s ownership.”

Hargray is owned by the Pritzker Organization, the merchant bank for the Tom Pritzker family. Tom Pritzker is also executive chairman of Hyatt Hotels Corp. Other investors in Hargray include Stephens Capital Partners, Redwood Capital Investments, WaveDivision Capital, and management.

The purchase price represents a multiple of about 17.2 times Hargrave’s annualized EBITDA, and 12.7 times cash flow assuming the synergies are realized immediately. 

Cable One said it plans to finance the transaction with a combination of cash, its revolving credit facility and the issuance of new equity. The company said it has received a $900 million bridge loan from J.P. Morgan and Credit Suisse to finance a portion of the deal. 

Cable One intends to finance the transaction with a combination of existing cash resources, revolving credit facility capacity, and proceeds from new indebtedness and/or equity capital. Cable One has received $900 million of definitive bridge loan commitments from J.P. Morgan and Credit Suisse to finance a portion of the purchase price.

Credit Suisse acted as lead financial advisor to Cable One, and J.P. Morgan also acted as financial advisor to Cable One. Cravath, Swaine & Moore LLP acted as legal advisor to Cable One on this transaction.

Cable One said it has entered into an agreement with Hargray Communications where it will contribute cable systems in Alabama to the Hilton Head, S.C.-based cable operator in exchange for an equity stake in the company.

Hargray has cable, telephone and broadband subscribers in South Carolina, Alabama, Georgia and Florida. As part of the deal, Cable One will contribute its cable system serving Anniston, Alabama and surrounding areas, in exchange for a minority equity stake in Hargray. The deal is expected to close this fall. 

Hargray already serves residents in nearby Pell City, Ala., and said in a press release the Cable One deal will expand its presence in the state and add residential and commercial customers to its growing business throughout the southeast. 

"At a time when reliable, high-speed Internet access has never been more essential to enable people and communities to connect and thrive, we are pleased to add the Alabama assets of Cable One to our growing portfolio," Hargray chairman and CEO Michael Gottdenker said in the press release. "We look forward to building upon Cable One's network investments to deliver premium communications products and solutions to homes and businesses in Anniston, Jacksonville, Oxford, and the surrounding communities."

Hargray is owned by the Pritzker Organization, the merchant bank for the Tom Pritzker family. Tom Pritzker is also executive chairman of Hyatt Hotels Corp. Other investors in Hargray include Stephens Capital Partners, Redwood Capital Investments, WaveDivision Capital, and management.

"We believe Hargray, whose values mirror our own, will be an excellent fit for the Anniston community. Hargray will be able to use its regional scale to further invest in the Anniston market while continuing to provide Anniston customers with the latest technological advancements and the highest level of customer care," Cable One CEO Julie Laulis said in a press release. "Additionally, and as a result of this transaction, Cable One will have the opportunity to share in Hargray's growth while increasing our opportunities for continued investment."

Hargray Communications said it has completed its purchase of certain assets of USA Communications in Pell City, Alabama and surrounding areas. Terms of the deal were not disclosed.

Hargray first announced the deal in January. 

Hargray said it will dedicate additional financial resources to grow USA Communications' network over the coming months, providing next generation products like Wall-to-Wall WiFi, digital TV with expanded viewing options and phone. Commercial customers will enjoy enhanced data, voice, and video services including Hosted Unified Communications, Metro-Ethernet, Symmetrical and Asymmetrical Internet, and customized video services.

"Hargray's approach is to fully engage in the communities it serves, and we look forward to the opportunity to join, serve, and engage local residents and businesses of this beautiful region,” said Hargray vice president of sales and operations Gwynne Lastinger in a press release. “We will deliver the same high-quality suite of residential and commercial services that we are known for in South Carolina and Georgia with personalized, local customer care."

Michael McHugh at B. Riley FBR, Inc. was financial advisor to USA Communications for this transaction.

Hargray Communications has agreed to purchase the Alabama assets of USA Communications. Terms of the deal were not disclosed

The deal, expected to close in early 2019, involves USA Communications systems in Pell City, Ala. and surrounding areas.

“We look forward to building upon USA Communications’ recent network investments and will deliver the fastest Internet service in town, a very high quality residential video service, and superior communications products and solutions to the businesses in the USA Communications’ service territory,” Hargray chairman & CEO Michael Gottdenker said in a statement.

Hargray plans to dedicate additional financial resources over the next year to grow USA Communications’ network to provide next-generation products and services to its residential customers.

“We are proud of what we have accomplished with this system over the last few years, but as we look toward the future of communications and entertainment services, it is our belief that Hargray’s larger scale and unique combination of technological expertise and community focus makes them the best possible choice to provide advanced telecommunications services to our communities,” USA Communications CEO Chris Hilliard said in a statement.

Michael McHugh at B. Riley FBR, Inc. was financial advisor to USA Communications for this transaction.