By Dhirendra Tripathi
Investing.com – WideOpenWest (NYSE:WOW) jumped 11% as the company sewed up two separate agreements to sell its businesses in five service areas for a combined value of $1.78 billion.
Atlantic Broadband, a U.S. cable operator and subsidiary of Cogeco Communications (TSX:CCA), has agreed to acquire WOW!’s Cleveland and Columbus markets in one transaction for $1.12 billion. In a separate pact, Astound Broadband has agreed to acquire WOW!’s Chicago, Evansville and Anne Arundel service areas for $661 million.
Cogeco shares rose 4%.
“The divestiture of these markets will enable us to reduce our debt as we continue to execute our broadband-first strategy, including pursuing our Edge-out and greenfield strategies and expanding our commercial services," a WOW! release quoted its CEO Teresa Elder as saying.
Upon closing, WOW!'s leverage ratio will be 2.5x, representing a significant reduction from 5x as of March 31, driven by lower net debt.
The transactions are expected to close in the second half of the year.
The broadband provider will continue to serve its customers in 14 service areas in Alabama, Florida, Georgia, Michigan, South Carolina, and Tennessee.