Canadian cable network operator Cogeco Connexion has entered into a definitive agreement to purchase DERYtelecom for CAD405 million (USD309 million). Saguenay-based DERYtelecom provides cable internet, TV and telephony services to approximately 100,000 customers in over 200 municipalities across several regions in Quebec, including Estrie, Lanaudiere, Monteregie and the Laurentians, making it the third largest cableco in the province (behind Videotron and Cogeco itself). DERYtelecom’s revenue and adjusted EBITDA for the fiscal year ended 31 August 2020 were estimated at CAD105 million and CAD44 million, respectively.
Group CEO of Cogeco Communications, Philippe Jette, noted that the acquisition of DERYtelecom is a strong strategic fit which will allow Cogeco Connexion to increase its presence in areas adjacent to its existing Quebec cable footprint. The buyer also highlighted opportunities to further expand the rural cable footprint through network extensions including via government funding programmes, under which DERYtelecom has already received support. Cogeco also expects annual run-rate synergies of approximately CAD3 million over the first year of acquisition via operational integration and economies of scale.
The takeover is subject to regulatory approvals under the Competition Act along with other customary closing conditions and is expected to close no later than the end of Cogeco’s second fiscal quarter in February 2021.