MONTREAL and TORONTO – After the close of trading on Friday, Cogeco Cable announced it has reached a definitive agreement to acquire all of the shares of Toronto Hydro Telecom, the telecommunications subsidiary of Toronto Hydro Corporation for $200 million.
The deal is subject to certain conditions, including regulatory approval by the commissioner of Competition. The purchase price represents a 9.6 multiple of the projected fiscal 2008 EBITDA of THTI. In addition, Cogeco Cable will assume a working capital deficiency and liabilities of approximately $4 million.
THT offers data communications and other telecommunications services such as Ethernet, private line, voice-over-Internet protocol, high-speed Internet access, dark fibre, data storage, data security and co-location to a wide range of business customers and organizations throughout the Greater Toronto Area.
“This agreement will allow Cogeco Cable to further the development of its business telecommunications activities. For Cogeco Cable, entering the GTA market, the largest local business telecommunications market in Canada, brings interesting growth opportunities for the foreseeable future,” reads Cogeco’s press release.
“It provides a unique opportunity to add owned and operated points of presence throughout the GTA, linked to its other broadband facilities extending over the dense telecommunications corridor from Windsor to Cornwall in Ontario. On the other hand, the market will continue to benefit from a real competitive alternative to dominant carriers provided by THTI as an alternative non-dominant facilities-based carrier. THTI customers will also be able to benefit from Cogeco Cable’s extensive fibre network spanning Ontario and Quebec.”
"This acquisition is another step in the enrichment of the Cogeco Business Solutions Data offering. THT’s state-of-the-art network, its dedicated work force and Toronto business market potential should complement our existing business telecommunications activities in Ontario and allow future growth for Cogeco Cable in this line of business," said Louis Audet, president and CEO of Cogeco Cable in a press release.
"The acquisition of THTI is a unique opportunity to add value for Cogeco Cable’s customers, shareholders and employees. It also demonstrates our willingness to seize upon external growth opportunities in our Canadian footprint when they arise and fit well with our business strategy," added Audet.
"This sale enhances our ability to invest in the renewal of our distribution system," added David O’Brien, president and CEO of Toronto Hydro.
