Cablefax The Magazine - September 2021 - 12

MSO M&A Mover
Cable One developed a winning
strategy for investments, particularly
in rural America.
Long before cord-cutting or the Rural Digital Opportunity Fund were
in the headlines, Cable One was at the forefront of de-emphasizing
video in favor of broadband and of expanding into rural markets. The
company set upon an M&A frenzy to help it implement those strategies,
making 10 investments over the past five years.
" We are interested in purchasing or investing in businesses that
provide residential or commercial broadband services in Tier 2, Tier
3 and rural markets. We are primarily focused on businesses that
are growing and share similar cultural attributes to Cable One, " says
Cable One CFO Steven Cochran.
Take the most recent transaction as an example. In February 2021,
Cable One acquired the remaining 85% of Hargray Communications
that it didn't already own. Like Cable One, Hargray is focused on
broadband, with 99% of customers in its 14 southern markets having
access to Gigabit services.
" The whole way (Cable One) think(s) about customer relationships
and competitive positioning is built around broadband, and their
cost structure and margins are built around broadband as their core
service, " says Craig Moffett, founding partner, MoffettNathanson.
The deal occurred a little over a year after Cable One exchanged
its system in Anniston, Alabama, and the surrounding area for 15%
of Hargray. This investment first-buy later approach illustrates the
provider's intent to gain stakes in companies that it would consider
owning down the road.
" That doesn't mean we have the right to or that we will eventually
own outright every business we invest in, but we need to believe
that we would desire full ownership over time, " Cochran says.
Cable One also knows that while it considers itself good at integration,
stacking too much can be a recipe for failure. Instead, get a foot
in the door and a feel for the company. " This allows us to invest our
balance sheet today in assets we like and with teams we believe in,
and that allow us to plan for integrations that will happen years into
the future, " Cochran says.
As Cable One enters new communities,
it is rebranding as Sparklight.
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September 2021
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Cablefax The Magazine - September 2021

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