Regional cable operator WideOpenWest (WOW!) is looking to put itself on the market, considering a sale of its business among other potential deal options, Bloomberg reported.
Details about the move were scarce, but Bloomberg said the company has hired an adviser to help drum up interest from prospective deal partners.
In a note to investors, KeyBanc analysts said they view a sale as “a likely scenario” for the company as well as other small cable players “given negative sentiment” around cable in light of the fiber boom sweeping the U.S. In February, Raymond James analyst Frank Louthan had flagged WOW as “a likely candidate for what we see as an industry roll-up in 2024 or beyond.”
A WOW! representative told Fierce it "does not comment on rumors and speculation."
KeyBanc pointed to AT&T, private equity firms like Apollo and existing WOW! shareholder Crestview Partners as well as telcos including Lumen Technologies and TDS Telecom as possible buyers. Apollo struck a $7.5 billion deal to acquire Lumen’s ILEC assets in 20 states last August and plans to overbuild those areas with fiber through a new company called Brightspeed.
Last June, WOW! inked a pair of deals to sell assets in five markets for a total of $1.8 billion, which was a valuation of 11 times EBITDA. It subsequently unveiled plans to roll out fiber to 200,000 locations by 2025, starting with a handful of greenfield markets in Florida.
Astound Broadband, which purchased WOW’s assets in three of the five markets, last year indicated an interest in more M&A deals to expand its footprint in new and adjacent markets. Astound itself traded hands in 2020 when private equity firms TPG Capital and Patriot Media Management sold it to Stonepeak Infrastructure Partners for $8.1 billion.
WOW! added nearly 13,000 high-speed data customers in 2021 to end the year with 511,700 HSD subscribers and 532,900 overall. It forecast it would add another 14,000 to 17,000 HSD customers in 2022. During a recent KeyBanc investor conference, WOW! CEO Teresa Elder stated its cable network uses DOCSIS 3.1 today, but "we're already well on our way" to DOCSIS 4.0.