Cogeco Inc. · TSX:CGO
Cogeco — Merger or Acquisition (July 2012)
14 slides from Cogeco's merger presentation, Jul 18, 2012
Slide 1: Cogeco Cable's Acquisition of Atlantic Broadband: Attractive Entry Point into the U.S. Market
Cogeco Cable’s Acquisition of Atlantic Broadband: Attractive Entry Point into the U.S. Market JULY 18, 2012
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements in this presentation may constitute forward-looking information within the meaning of securities laws. Forward-looking information may relate to our future outlook and anticipated events, our business, our operations, our financial performance, our finan
Slide 3: Atlantic Broadband at a Glance
Atlantic Broadband at a Glance ▬ 14th largest cable provider in the U.S. which offers analog and digital video, high speed internet and telephony services for residential and commercial customers ▬ Technologically advanced network – ~7,900 miles of network plant with an average density of 65 homes p
Slide 4: Expands Cogeco's Geographic Footprint into the U.S.
Expands Cogeco’s Geographic Footprint into the U.S. Cogeco Cable Headquarters Montreal, QC ABB ▬ Western Pennsylvania Headquarters –Homes Passed: 243,177 Quincy, MA –Basic Customers: 122,419 ▬ Maryland / Delaware –Homes Passed: 60,530 –Basic Customers: 21,126 ▬ Aiken (South Carolina) –Homes Passed:
Slide 5: Acquisition Rationale
Acquisition Rationale ▬ Attractive entry point into the U.S. markets ▬ High quality network infrastructure Strategic ▬ Significant increase in PSU base for Cogeco with further growth potential – 14th largest cable provider in the U.S. with 480,057 PSUs(1) ▬ Ability for Cogeco to leverage its core kn
Slide 6: Transaction Overview
Transaction Overview (US$ Millions, except ratios) ▬ $1,360 million Transaction Value ▬ Financed with existing balance sheet flexibility – No new equity required Transaction ▬ 8.3x 2013E EBITDA Multiple ▬ Compares favorably to recent acquisition multiples Existing Cash on Balance Sheet(1) $150 Unuse
Slide 7: Strong Revenue and EBITDA Growth
Strong Revenue and EBITDA Growth (US$ Millions) REVENUE EBITDA $155 50.0% $335 $329 150 $149 49.0% 330 48.0% 325 145 47.0% 320 140 $317 $138 46.0% 315 45.3% 135 310 45.0% 130 305 43.5% 44.0% $302 $125 125 300 43.0% 120 295 41.4% 42.0% 290 115 41.0% 285 110 40.0% 2009A 2010A 2011A 2009A 2010A 2011A E
Slide 8: Residential Product Overview
Residential Product Overview Video Services High Speed Data Voice Services ▬ Diverse line-up of basic, ▬ Top speeds from 40 – 110 ▬ Managed private internet digital video and premium Mbps in most markets. Protocol network connects video programming DOCSIS 3.0 Technology directly to PSTN and delivers
Slide 9: Investment Highlights
Investment Highlights ▬ Internet Superiority Driving Advanced Penetration – Faster Internet speeds driven by DOCSIS 3.0 provide sustainable competitive advantage ▬ Sizable Opportunity for Expansion 2011 Penetration: Atlantic Broadband vs. Peers(1) Source: Atlantic Broadband. (1) Penetration as a % o
Slide 10: Investment Highlights (Continued)
Investment Highlights (Continued) ▬ Commercial Growth Opportunity – ~27% commercial services revenue CAGR from 2009 – 2011 with less than 10% share of total market spend – Sizable growth opportunity to expand into largely untapped small and mid-sized enterprise segment through increased market penet
Slide 11: Enhancing Cogeco's Growth Profile
Enhancing Cogeco’s Growth Profile Cogeco Cable Atlantic Broadband Cogeco as of 5/31/2012 as of 6/30/2012 Pro Forma Homes Passed 1,641,579 515,346 2,156,925 PSUs 1,962,174 480,057 2,442,231 Basic Customers(1) 868,873 251,718 1,120,591 HSI Customers 628,852 155,845 784,697 Phone Customers 464,449 72,4
Slide 12: Unaudited Pro Forma Financial Highlights – Pro Forma 2012E
Unaudited Pro Forma Financial Highlights – Pro Forma 2012E ($ Millions) Cogeco Cable Atlantic Broadband Pro Forma 08/31/ 2012 12/31/ 2012 Revenue $1,280 $346 $1,626 EBITDA $585 $154 $739 Operating Margin 45.7% 44.5% 45.4% Total Indebtedness $1,610(1) $660(2) $2,270 Total Indebtedness / 2.7x 4.3x 3.1
Slide 13: Financing Considerations
Financing Considerations ▬ Acquisition will be financed through: – Cogeco Cable contribution of $700 million – Approximately $150 million of cash on balance sheet and draw-down on existing unused revolver of $550 million – Refinancing of Atlantic Broadband through a committed $660 million 1st Lien T
Slide 14: Unique Opportunity to Enter the U.S. Market
Unique Opportunity to Enter the U.S. Market ▬ Attractive markets Strategic ▬ Industry leading growth with sizable opportunity for expansion Opportunity ▬ Technologically Advanced Network ▬ Expected EPS(1) and CFPS accretion in the first year ▬ Continued free cash flow generation ▬ Continued commitme