Cogeco Communications Announces Acquisition of DERYtelecom

  • Cogeco Connexion
  • DERYtelecom

MONTREAL – Cogeco Communications announced its Canadian subsidiary Cogeco Connexion has entered into a definitive agreement to purchase DERYtelecom, the third largest cable provider in the province of Quebec for $405 million.

DERYtelecom is based in Saguenay, Quebec and offers internet, television and telephony services to approximately 100,000 customers in over 200 municipalities across several regions in Quebec, including Estrie, Lanaudière, Montérégie and the Laurentians. Revenue and adjusted EBITDA for the fiscal year ended August 31, 2020 are estimated to be $105 million and $44 million, respectively.

“The acquisition of DERYtelecom is a strong strategic fit which will allow Cogeco Connexion to increase its presence in areas that are adjacent to its Quebec footprint and to build on the long history of mutual respect, collaboration and friendship between the two companies,” said Philippe Jetté, president and CEO of Cogeco Communications. “Our proven track-record in the successful integration of regional cable businesses, having acquired five companies in the U.S. and Canada over the past five years alone, demonstrates our commitment to bring superior connectivity to regional and rural communities.”

Acquisition Rationale

• DERYtelecom’s regional operations in Quebec are very similar to Cogeco’s.

• Opportunity to leverage Cogeco Connexion’s product and sales expertise to add to DERYtelecom’s service offering, increase the customer base and deliver superior revenue growth.

• Annual run-rate synergies of approximately $3 million to be realized gradually over the 1st year as operations are integrated and economies of scale are realized.

• Opportunity to further expand Cogeco Connexion’s rural footprint through network extensions, including through government funding programs, of which some were already awarded to DERYtelecom.

 

 

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