Wednesday, October 22nd12.9°C
23840
22501

Quebec's Cogeco expects some U.S. cable acquisitions down the road

MONTREAL - Cogeco will look south to increase the size of its cable TV business as few opportunities exist in Canada, CEO Louis Audet says.

The head of the media and cable company said Tuesday the Quebec company sees a possible acquisition of a small U.S. cable company later next year, after it pays down more debt.

Cable companies in Canada are big, reasonably profitable and generally not for sale, said Audet, whose company is the country's fourth-largest cable TV provider.

"What you see is pretty much what you get unless something really special comes out of left field," he said before the company's annual meeting.

"The potential exists in the U.S. where it doesn't in Canada."

Deals for cable companies in Canada have been few and far between in recent years.

Rogers Communications Inc. (TSX:RCI.B) tried to buy Quebec cable operator Videotron in 2000, but lost out to Quebecor (TSX:QBR.B), which was backed by the Caisse de depot et placement du Quebec.

Meanwhile, media and cable TV company Shaw Communications (TSX:SJR.B) sold its Ontario-based Mountain Cablevision Ltd. to Rogers last January.

Audet's family-controlled company, though, has been sought after.

Rogers has shown interest in buying Cogeco Cable, owning a minority stake. But Audet, Cogeco's controlling shareholder, has shown no interest in selling the company his father founded in 1957 with a TV station in Trois-Rivieres, Que.

Cogeco got a toehold in the U.S. market with a US$1.36-billion deal to buy Atlantic Broadband in 2012, its first big acquisition since its failed venture into Portugal.

Atlantic Broadband has operations in Pennsylvania, Florida, Maryland, Delaware and South Carolina and also offers Internet and telephone services to residential and business customers.

While the company waits for an opportunity in the United States, Audet said it will have to grow through the services it offers, including cable TV and expanding business services.

"Cable was traditionally built on the residential market. But what you see today, not just from us, but from other cable operators is extending networks to industrial parks and bringing on larger customers," he said.

"These are typically larger customers who will pay you $600 a month or $1,200 a month."

Cogeco, like its peers, has been offering data services to businesses. The company bought Internet infrastructure provider PEER 1 Network Enterprises in late 2012. PEER 1, whose headquarters and primary network centres are in Vancouver, specializes in data hosting for companies, among other services.

Audet said Cogeco's data services and PEER 1 both have growth rates of more than 15 per cent a year.

Canaccord Genuity analyst Dvai Ghose said he doesn't expect any consolidation in Canada's cable TV market for the foreseeable future.

"Unlike in the U.S., foreigners cannot control Canadian cable companies," Ghose said in a recent note.

"While the market perennially speculates about a Rogers' acquisition of Shaw, we do not believe that regulators would allow Rogers to acquire Shaw at this time."

Cogeco reported strong financial results for the fourth quarter, late Monday.

Parent company Cogeco Inc. (TSX:CGO) said profit attributable to owners of the corporation amounted to $23.1 million, or $1.37 per diluted share. That's up from $18.5 million, or $1.10 per share in the same year-earlier period.

Revenue increased 41 per cent to $517 million from $366.6 million.

Subsidiary Cogeco Cable Inc. (TSX:CCA) saw its revenue soar 44.9 per cent to $475 million, up from $327.9 million in the year-earlier period.

Net profit increased to $49.7 million or $1.01 per diluted share, up from $42.1 million or 86 cents per diluted share a year ago.

Shares in Cogeco Cable were down 76 cents to $49.56, while shares in parent company Cogeco Inc. were up 50 cents to $49 in afternoon trading on the Toronto Stock Exchange.

The Canadian Press


Read more Business News

23434


Recent Trending




Today's Market
S&P TSX14448.80-98.91
S&P CDNX819.63-2.65
DJIA16652.0737.26
Nasdaq4435.342+15.863
S&P 5001948.94+7.66
CDN Dollar0.8919+0.001
Gold1244.00-7.70
Oil81.35-0.61
Lumber329.50-0.10
Natural Gas3.68-0.031

 
Okanagan Companies
Pacific Safety0.12+0.02
Knighthawk0.01-0.005
QHR Technologies Inc1.16-0.01
Cantex0.055-0.025
Anavex Life Sciences0.192+0.001
Metalex Ventures0.05+0.005
Russel Metals32.68-0.41
Copper Mountain Mining2.07-0.10
Colorado Resources0.145-0.005
ReliaBrand Inc0.013+0.001
Sunrise Resources Ltd0.060.00
Mission Ready Services0.460.00

 



22625

FEATURED Property
19989104450 Gordon Dr
2 bedrooms 2 baths
$499,900
more details
image2image2image2
Click here to feature your property
Please wait... loading


Keep it rubber side down

This time of year, I always worry about which friends of mine will get caught going off the road in adverse weather conditions. With a little preparation most accidents can be avoided. Having won the...


Big bank predicts rate hike

Photo: Thinkstock.comThe end of record-low rates is nigh, according to one major bank, which has taken a stance and predicted when the Bank of Canada will raise its long-standing overnight rate. &ldq...


Experts share strategies in Kelowna

The third week in October is “Small Business Week”, a week dedicated to supporting local, small businesses. The week was designed to bring awareness to Canadians about the role small busin...

_








Member of BC Press Council


23091