Cable One Enhances Flexibility in Strategic Investment in Mega Broadband Investments

Cable One announced that it has amended the terms of its strategic investment in Mega Broadband Investments 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, while affiliates of GTCR and MBI management own the remaining interest. 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.

MBI is a leading provider of broadband services across the Southeast, Northwest, and Mid-South United States and offers a 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.

As part of the amended partnership agreement, Cable One paid $250 million to the other MBI equity holders, and those same 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. New arrangements were also implemented 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.

The purchase price payable by Cable One at the closing of a call option exercise or put option exercise will be calculated under a formula based on a multiple of MBI’s adjusted earnings before interest, taxes, depreciation, and amortization for the 12-month period ended June 30, 2025, and MBI’s total net indebtedness, less a dollar-for-dollar reduction for both the upfront payment and the proceeds from the new MBI debt received by the other MBI equity holders as part of the amendment.