Denver-based cable company and broadband provider WideOpenWest Inc. announced Monday that it has agreed to a buyout offer that values the company at $1.5 billion from its largest investor and an even larger private equity firm.
DigitalBridge Investments LLC and Crestview Partners, which owns 37% of the company’s shares, have offered to pay $5.20 a share in cash for the remaining equity in the company that they don’t control. That represents a 63% premium to the value the stock market had placed on the company as of Friday.
WOW! shares were up 6.9% on Monday to $3.41 and crossed $5 a share in after-hours trading, which represents an additional 50% gain.
“This transaction offers significant and immediate value to stockholders, and after a thorough review process the special committee concluded that the consideration offered in this transaction, which represents a significant premium to WOW!’s trading price, offers the best available value to WOW! stockholders,” said Phil Seskin, a director on the board of WOW!, in the release.
Cable industry veteran Jeffrey Marcus founded WOW! in 1999 and on May 25, 2017, the company went public at $17 a share, an offering that raised $310 million and valued the company at $1.4 billion.
That offering was below the expected range of $20 to $22 a share and the company didn’t reach those levels until mid-2021, before starting to fall again in late 2022. As of Monday, WOW! shares were down about 80% from the IPO price, which translated into a market value of $291.5 million.
Teresa Elder is CEO of WOW!. Marcus has stayed on as the company’s executive chairman and is also vice chairman with Crestview, a New York-based private equity firm with more than $10 billion under management.
Jonathan Friesel, head of fiber at DigitalBridge, a private equity and buyout firm based in Boca Raton, Fla., that oversees more than $100 billion in investments, said the transaction should provide meaningful benefits to WOW!’s 2 million residential and business customers, who are concentrated in the Midwest and Southeast.
“We intend to invest in expanding and upgrading WOW!’s networks, adopting new technologies, and ensuring the organization has the resources and support needed to continue delivering fast, reliable internet service and a high-quality customer experience at competitive prices,” Friesel said in the release.
The purchase is expected to be completed later this year or early next year, pending stockholder and regulatory approvals, at which point the company will let go of its exclamatory ticker symbol — WOW.
WOW! ranks as the country’s eighth-largest cable provider and had about 1,320 employees at the end of last year, of which 28 worked at the Denver Tech Center headquarters. Although based in Colorado, the company doesn’t serve any cable customers in the state.