Charter Communications has struck a deal to acquire Cablevision's Optimum West holdings in four Western states for $1.625 billion in cash, the companies announced Thursday.
Optimum West, under the Cablevision subsidiary Bresnan Broadband Holdings, manages cable operating systems in Colorado, Montana, Wyoming and Utah, servicing 660,000 homes with 304,000 video subscribers and 366,000 customers.
"These former Bresnan properties operate in growing communities, and the network, employees and customer base have been well served for many years," Tom Rutledge, Charter's President and CEO, said in a statement. "Optimum West is an ideal fit for Charter and we anticipate an efficient integration process."
The purchase price is nearly nine times Optimum West's third-quarter earnings before interest, taxes, depreciation and amortization.
"Given the double digit growth profile of Optimum West, we view the implied purchase price multiple as attractive," Christopher Winfrey, Charter's chief financial officer, said in the statement.
Charter is funding the acquisition with $1.5 billion of committed bank loans and liquidity from cash on hand.
The transaction is subject to customary closing conditions, including regulatory approval. Charter said it expects the deal to close during the third-quarter of the 2013 fiscal year.
Credit Suisse, Goldman Sachs, Citi and J.P Morgan were the lead advisors on the deal.
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