Cable One continued to expand its footprint, agreeing to take a minority stake in Mega Broadband Investments, parent of Vyve Broadband, for $547.1 million. The deal adds about 630,000 homes in 16 states to its service territory.

The Phoenix-based operator will get a 45% stake in MBI. The deal, expected to close in the fourth quarter, includes an option for Cable One to purchase the remaining interest in MBI, beginning in 2023.

The agreement will add broadband and pay TV customers in Alabama, Arkansas, California, Colorado, Georgia, Idaho, Kansas, Louisiana, Nebraska, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Washington, and Wyoming. Vyve does not release customer figures.

Cable One has been an aggressive buyer of broadband assets. The MBI deal is the fifth purchase it has made of a broadband company since 2017, when it bought New Wave Communications from Chicago-based private equity firm GTCR, for $735 million.  

GTCR formed Mega Broadband in 2017 and later rolled up several small cable and broadband service providers, including Vyve, Northland Communications and Eagle Communications. Those operations were combined under the Vyve Broadband name in 2019.

“This strategic investment in MBI reflects a continuation of our commitment to provide rural America with reliable high-speed internet service,” Cable One president and CEO Julie Laulis said in a press release. “MBI has developed an excellent network in geographies complementary to our existing footprint and we are excited to share in its future growth. MBI’s operating model and local-first focus mirrors our own and we are pleased to partner with MBI.”

MBI has upgraded systems and a high-capacity plant with more than 15,800 network plant miles, including more than 4,100 fiber route miles, capable of delivering Gigabit speeds across its footprint.

Vyve Broadband has focused most of its efforts on growing broadband over the past few years. That should fit in well with Cable One, which has been a pioneer in offering broadband-only service, and now has more than twice as many high-speed internet customers as it does video subscribers. In the second quarter, Cable One said it had 758,000 residential broadband subscribers, 276,000 residential video customers and 98,000 residential voice subs.

With 630,000 homes passed, the MBI deal will push Cable One’s total footprint, currently at 2.3 million homes passed, to nearly 3 million residences. 

“This transaction represents the next step of MBI’s ongoing transformation, and I am excited to have the backing of Cable One alongside GTCR,” MBI CEO Phil Spencer said in a press release. “Over the last few years, our team has invested significant capital to upgrade our networks, roll out Gigabit internet service, and enhance business services across our footprint. Under our new partnership, we plan to continue making significant investments in our network, our communities and our employees.”

Kirkland & Ellis LLP acted as legal adviser and Credit Suisse acted as financial adviser to MBI. Locke Lord LLP acted as legal adviser and Truist Securities, Inc. as financial adviser to Cable One. 

CableOne said it has agreed to purchase a 45% interest in Mega broadband Investments Holdings from private equity firm GTCR, parent of small market cable and high-speed internet provider Vyve Broadband, for $547.1 million in cash. The transaction is expected to close in the fourth quarter. 

In addition to the stake, Cable One also has the right to purchase the remaining interest in Mega Broadband at a predetermined earnings multiple, beginning in 2023. 

Mega Broadband was formed in 2017 by private equity firm GTCR, which rolled up several small cable and broadband service providers, including Vyve, Northland Communications and Eagle Communications earlier in the decade. Those operations were combined under the Vyve Broadband name and provide service to customers in rural markets across Alabama, Arkansas, California, Colorado, Georgia, Idaho, Kansas, Louisiana, Nebraska, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Washington, and Wyoming. Vyve’s network passes about 630,000 homes.

“This strategic investment in MBI reflects a continuation of our commitment to provide rural America with reliable high-speed internet service,” said Cable One CEO Julie Laulis in a press release. “MBI has developed an excellent network in geographies complementary to our existing footprint and we are excited to share in its future growth. MBI’s operating model and local-first focus mirrors our own and we are pleased to partner with MBI.”

MBI has upgraded systems and a high-capacity plant with more than 15,800 network plant miles, including over 4,100 fiber route miles, capable of delivering Gigabit speeds across its footprint.

Related: Fulfilling a Vision of Small Town Broadband 

“This transaction represents the next step of MBI’s ongoing transformation, and I am excited to have the backing of Cable One alongside GTCR,” said MBI CEO Phil Spencer in a press release. “Over the last few years our team has invested significant capital to upgrade our networks, roll out Gigabit internet service, and enhance business services across our footprint. Under our new partnership, we plan to continue making significant investments in our network, our communities, and our employees.”

Kirkland & Ellis LLP acted as legal advisor and Credit Suisse acted as financial advisor to MBI.

Locke Lord LLP acted as legal advisor and Truist Securities, Inc. acted as financial advisor to Cable One.

“We are excited by Cable One’s investment in MBI. We view Cable One as a leader in the industry with its broadband-first approach, which we have sought to emulate at MBI,” said GTCR managing director Stephen Jeschke in a press release. “We look forward to our partnership and our collective continued investment to advance the broadband networks in the rural communities MBI serves.”

Chicago-based private equity fund GTCR and Mega Broadband Investments said Monday that they have completed the purchase of small cable and telecom company Vyve Broadband.

Vyve provides high-speed data, video and voice services to customers in mostly rural markets in Oklahoma, Kansas, Texas, Arkansas, Louisiana, Tennessee, Georgia and Wyoming. The deal was first announced in July. Terms were not disclosed.

Related: Fulfilling a Vision of Small Town Broadband 

This is the third cable purchase for Mega Broadband -- in October 2018 it bought Northland Communications and in August completed a deal for the broadband assets of Eagle Communications.

Kirkland & Ellis LLP provided legal counsel, PricewaterhouseCoopers served as accounting advisor, and Lazard Middle Market LLC acted as exclusive financial advisor to GTCR and MBI.

Private equity firm GTCR has teamed with Mega Broadband Investment to buy small cable operator Vyve Broadband, a provider of voice, video and data based in Shawnee, Okla. Terms were not disclosed.

Vyve provides high-speed data, television and voice services to residential and business customers in rural markets across Oklahoma, Kansas, Texas, Arkansas, Louisiana, Tennessee, Georgia and Wyoming. The purchase will be completed through GTCR’s previously established management partnership with MBI and comes less than a year after MBI’s initial investment in Northland Communications. MSI said in a press release that the deal will double its footprint.

Related: Fulfilling a Vision of Small Town Broadband

MBI is headed by long-time cable executive Phil Spencer. MBI and GTCR have partnered before --first in 2012 to form Rural Broadband Investments and later in 2017 the two established MBI – a second management start-up with Mr. Spencer – to focus on acquiring rural broadband assets. Last year the two companies purchased Northland Communications. 

“The acquisition of Vyve is an exciting addition to MBI following our recent platform acquisition of Northland,” Spencer said in a press release. “Vyve has developed an excellent network in attractive geographies and we look forward to leveraging Vyve’s state-of-the-art infrastructure to continue to rollout enhanced high-speed data services to both our residential and commercial customers. Further, Vyve has an outstanding employee base, and we plan to build upon the excellent work they have done to date in efforts to continuously improve the quality of service to our customers.”

GTCR and MBI’s investment in Vyve will be funded from GTCR Fund XII, a private equity fund raised in 2017 with $5.25 billion of limited partner capital commitments. Kirkland & Ellis LLP provided legal counsel, PricewaterhouseCoopers served as accounting advisor and Lazard Middle Market LLC acted as exclusive financial advisor to GTCR and MBI.

“The Vyve acquisition is an exciting opportunity to continue to build our investment in the cable industry,” GTCR managing director Phil Canfield said in a press release. “We look forward to continuing our work with Phil Spencer and his team to build a leading cable platform through increasing high-speed data penetration, growth in commercial services, and additional accretive acquisitions.”

GTCR and MBI’s investment in Vyve will be funded from GTCR Fund XII, a private equity fund raised in 2017 with $5.25 billion of limited partner capital commitments. Kirkland & Ellis LLP provided legal counsel, PricewaterhouseCoopers served as accounting advisor and Lazard Middle Market LLC acted as exclusive financial advisor to GTCR and MBI.

Chicago-based private equity firm GTCR and Mega Broadband Investments said they have agreed to purchase Northland Communications, a voice, video and high-speed data provider to rural market customers in the Southeast, Texas and the Northwest. Terms of the deal were not disclosed.

GTCR and MBI first established their partnership in 2017 to purchase rural broadband providers. MBI chief executive Phil Spencer was previously CEO of Rural Broadband Investments, a GTCR-backed rural service provider that acquired several small operators across the country and was sold to Cable One last year.

"The acquisition of Northland Communications is a great first step and provides us with an excellent platform to build upon," Spencer said in a statement. "Northland has laid the groundwork by beginning network upgrades that will give us state-of-the-art infrastructure through which to rollout enhanced high-speed data services to both our residential and commercial customers. Further, Northland has an outstanding employee base, and we plan to continue building upon the excellent work they have done to date while investing tens of millions of incremental dollars into the network over the course of our first year of ownership."

Northland owns and operates smaller-market cable systems in Alabama, California, Georgia, Idaho, North Carolina, South Carolina, Texas and Washington.

"Along with the rest of my executive team I want to thank all the Northland employees for the success we have had at Northland over the last 37 years," Northland founder John Whetzell said in a statement. "We have enjoyed a tremendous run and I am excited to watch the organization continue to thrive under GTCR's ownership and Phil's leadership."

GTCR and MBI's investment in Northland will be funded from GTCR Fund XII, a private equity fund with $5.25 billion of limited partner capital commitments. Kirkland & Ellis LLP provided legal counsel and PricewaterhouseCoopers served as accounting advisor to GTCR. Perkins Coie LLP provided legal counsel to Northland.

"We are excited to continue our partnership with two-time GTCR CEO Phil Spencer," GTCR managing director Phil Canfield s aid in a statement. "We have evaluated numerous opportunities within the cable industry and believe that Northland represents an exciting platform. John and his team deserve a tremendous amount of credit for building Northland into what it is today and we look forward to carrying on John's legacy as we continue growing the business both organically and via complementary acquisitions."