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.
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.
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