Cable One has officially closed on its $735 million purchase of Sikeston, Missouri-based cable operator NewWave Communications.
The all-cash deal was originally announced in January, expanding Phoenix-based Cable One’s footprint by 214,000 residential subscribers in non-urban areas of Arkansas, Illinois, Indiana, Louisiana, Mississippi, Missouri and Texas. NewWave also touts 31,000 business subscribers and 428,000 residential passings.
The merger of Cable One and NewWave creates a cable company serving more than 1.2 million primary service units in 21 states.
“Our acquisition of NewWave is extremely positive for our customers, our associates and our shareholders,” said Julie Laulis, president and CEO of Cable ONE, in a statement. “I am pleased to welcome the NewWave teams from around the country to Cable One as we work together to integrate and deliver on our financial objectives.”
The deal is valued at 11.5 times New Wave’s $64 million annualized cash flow for the fourth quarter—before cost synergies, etc. (The valuation methodology is explained in all its complicated glory here in the press release.)
Cable One said it will finance the deal with $650 million of senior secured loans and cash on hand.
Indeed, perhaps the biggest surprise in Cable One's announcement isn’t that they are buying rather than selling. It is that the $735M transaction is all cash, Moffett noted.