Cable One tweaks Mega Broadband agreementCable One tweaks Mega Broadband agreement

Cable One, Inc. (NYSE: CABO) ("Cable One") announced today that it has amended the terms of its strategic investment in Mega Broadband Investments Holdings LLC ("MBI") to provide enhanced timing flexibility for Cable One's potential acquisition of full ownership of MBI. Cable One currently owns a 45% stake in MBI, and affiliates of GTCR LLC ("GTCR") and MBI management own the balance of MBI. The amendments provide Cable One with enhanced ability to control the timing for acquiring the 55% interest it does not currently own pursuant to the put right held by GTCR, with any such acquisition to occur no earlier than October 1, 2026 unless Cable One elects to close the transaction at an earlier date.

"Our strategic investment in MBI reflects our commitment to provide rural America with reliable high-speed internet service," said Julie Laulis, President and CEO of Cable One. "We continue to value MBI for all the reasons that first drew us to them: their commitment to providing leading broadband services in rural markets, their track record of strong growth and impressive potential for future growth, as well as their exceptional team."

MBI is a leading provider of broadband services across the Southeast, Northwest and Mid-South United States and offers an extensive range of broadband, fiber connectivity, cable television and voice services for commercial and residential customers under the Vyve Broadband brand. MBI's total revenues for the 12 months ended September 30, 2024 were approximately $320 million, with approximately 226,000 residential and business data customers across a network footprint with approximately 674,000 passings as of September 30, 2024.

Transaction Details

As part of the amended partnership agreement, Cable One paid $250 million to the other MBI equity holders, and those same other equity holders also received the proceeds from $100 million of new MBI debt. The combined $350 million of payments will reduce the purchase price payable by Cable One on a dollar-for-dollar basis for the 55% interest in MBI it does not currently own as described in more detail below. Concurrently, new arrangements were put in place to provide timing flexibility for Cable One's potential acquisition of full ownership of MBI:

Cable One has a new option to call the 55% of MBI it does not already own, exercisable starting in the third quarter of 2025; GTCR's existing option to put to Cable One the 55% of MBI it does not already own has been adjusted to defer the closing of any put exercise to no earlier than October 1, 2026 (unless Cable One elects to cause the closing to occur earlier); If the closing of a put option exercise or call option exercise occurs prior to October 1, 2026, the purchase price payable by Cable One will be discounted at a rate of 12% for the period from October 1, 2026 to the closing date.

Read the full press release here.

Cable One