Cable One buys remaining stake in Hargray in $2.2B deal

This isn’t the first acquisition for Cable One. (Image by Steve Buissinne from pixabay.com)

Cable One continues its acquisition frenzy. The company, which offers broadband connectivity through its Sparklight brand to 900,000 residential and business customers in more than 21 states, has agreed to acquire the remaining 85% of Hargray Communications. Cable One is already a minority investor in Hargray, having secured a 15% stake in the company last October, which allowed Hargray to expand into Alabama. 

The deal implies a $2.2 billion total value for 100% equity interest in Hargray and is expected to close in the second quarter. The purchase will significantly expand Cable One’s presence in the Southeastern U.S. and increase its fiber footprint. Hargray says it offers gigabit-capable services to approximately 99% of its customers in Alabama, Florida, Georgia and South Carolina.

About 60% of Hargray’s total revenues come from residential data and business services. The company generated approximately $128 million adjusted EDITDA on an annualized basis for the fourth quarter ending December 31, 2020. Its fourth quarter net loss was about $28 million.

Cable One said it expects to realize about $45 million in estimated annual run-rate synergies within three years of closing on the deal.

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This isn’t the first acquisition for Cable One. Last July the company acquired Valu-Net, an all-fiber ISP, for $38.9 million in cash. The company also acquired a 45% ownership of Mega Broadband, which owns Vyve Broadband, last September. And it has also invested in two fixed wireless ISPs, Wisper Internet and NextLink, which indicates the company is taking a technology-agnostic approach to its broadband services.

As of the end of third quarter 2020, Cable One said it had 2.35 million homes passed with fiber, which was an increase of 215,000 homes from the same quarter in the previous year.

Last month the company’s enterprise business, Sparklight Business, announced it had launched a new optical wavelength service on its fiber backbone that will provide dedicated, point-to-point high capacity data services to business and carrier customers in its footprint.