Altice USA has agreed to acquire Morris Broadband — in a deal with an enterprise value of $310 million – in order to expand presence with its Suddenlink business.
North Carolina will represent the sixth largest state for Altice USA out of its 21 states of operations in terms of number of residential customers, following this acquisition.
Morris Broadband provides data, video and voice services to approximately 36,500 residential and business customers in western North Carolina. Morris Broadband passed approximately 89,000 homes throughout communities including Hendersonville, Franklin, Sylva, Nebo and West Jefferson with broadband penetration of approximately 35 percent.
“Morris is a perfect fit for Altice as we are accelerating our network expansion with increased investment in edge outs, upgrades of underdeveloped systems and FTTH deployment to drive customer, revenue and cash flow growth,” Dexter Goei, chief executive officer of Altice USA said.
Morris Broadband generated approximately $13 million in Adjusted EBITDA on an annualized basis for the quarter ended December 31, 2020. The purchase price represents a multiple of Morris Broadband’s Q4 LQA Adjusted EBITDA of approximately 24.1x before taking into account estimated run-rate synergies.
Including the estimated run-rate synergies that Altice USA expects to realize in full within two years of closing the transaction and adjusting for the present value of anticipated tax benefits, the purchase price represents a multiple of projected 2022 Adjusted EBITDA of 7.4x.
Altice USA intends to finance the transaction with available liquidity. The transaction is subject to certain regulatory approvals and other customary closing conditions and is expected to be completed in the second quarter of 2021.
Moorgate Securities acted as financial advisor to Morris Broadband in connection with this transaction.