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.
“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.”
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Mike Farrell is senior content producer, finance for Multichannel News/B+C, covering finance, operations and M&A at cable operators and networks across the industry. He joined Multichannel News in September 1998 and has written about major deals and top players in the business ever since. He also writes the On The Money blog, offering deeper dives into a wide variety of topics including, retransmission consent, regional sports networks,and streaming video. In 2015 he won the Jesse H. Neal Award for Best Profile, an in-depth look at the Syfy Network’s Sharknado franchise and its impact on the industry.