Cable ONE (Sparklight) has announced it has entered into a definitive agreement to acquire the 85% equity interest in Hargray Acquisition Holdings (Hargray) that it does not already own. The cableco has been a minority investor in Hargray since 1 October 2020, when it contributed its cable system serving Anniston, Alabama and surrounding areas to Hargray in exchange for equity interests representing approximately 15% of the smaller company. The transaction – which implies a USD2.2 billion total enterprise value for 100% of the equity interests of Hargray on a debt-free and cash-free basis – will expand Cable ONE’s presence into the south-eastern US and enable the cableco to capitalise on Hargray’s expertise in fibre expansion.
Cable ONE says it intends to finance the transaction with a combination of existing cash resources, revolving credit facility capacity, and proceeds from new indebtedness and/or equity capital. Cable ONE has received USD900 million of definitive bridge loan commitments from JP Morgan and Credit Suisse to finance a portion of the purchase price. The transaction is subject to certain regulatory approvals and other customary closing conditions and is expected to be completed during the second quarter of 2021.
Founded in 1947, Hargray serves 125,000 residential and business customers in 14 markets across Alabama, Florida, Georgia and South Carolina. Hargray currently offers gigabit-capable services to approximately 99% of its broadband users. The stake was sold by an investor group comprising The Pritzker Organization (TPO), Stephens Capital Partners, Redwood Capital Investments and WaveDivision Capital.