Caisse de dépôt et placement du Québec is helping Cogeco Communications Inc. acquire a network of cable systems in the United States with an equity investment of US$315 million.
In return, the institutional investor will gain a 21 per cent interest in the Canadian communications company’s subsidiary, Atlantic Broadband, which is the ninth-largest cable operator in the U.S.
“As a long-term investor, CDPQ seeks opportunities to invest in businesses that are resilient to economic cycles, are led by experienced teams and have the ability to sustain growth over time,” said Christian Dubé, executive vice-president of Quebec at Caisse, in a news release. “Cogeco is a good example of this, and we look forward to investing by its side as it pursues its North American expansion.”
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Alongside Caisse’s investment, Cogeco will use secured debt from two banks to buy the cable systems operating in New Hampshire, Maine, Maryland, Pennsylvania and Virginia under the name MetroCast Communications from parent company Harron Communications.
“We are delighted to be partnering with CDPQ in this transaction, providing us with a long-term partner with a similar vision,” said Louis Audet, president and chief executive officer at Cogeco.
“The partnership will enable us to pursue our growth objectives in the U.S. cable market in the future. CDPQ’s investment also highlights the value of these assets and our U.S. business, as well as the growth opportunity embedded in these businesses.”
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