Cogeco Communications

Press release details


For immediate release
Cogeco Cable acquires Toronto Hydro Telecom Inc.
Montréal, June 13, 2008 — Cogeco Cable Inc. (TSX: CCA), the second largest cable
telecommunications operator in Ontario, Québec and Portugal, respectively, based on the number
of Basic Cable service customers served, announced today it has reached a definitive agreement to
acquire all of the shares of Toronto Hydro Telecom Inc. (“THTI”), the telecommunications subsidiary
of Toronto Hydro Corporation, subject to certain conditions, including regulatory approval by the
Commissioner of Competition. The purchase price of $200 million for all the shares of THTI
represents a 9.6 multiple of the projected fiscal 2008 EBITDA of THTI. In addition, Cogeco Cable
will assume a working capital deficiency and liabilities of approximately $4 million.
THTI offers data communications and other telecommunications services such as Ethernet, private
line, Voice-over-Internet protocol (“VoIP”), high-speed Internet access, dark fibre, data storage, data
security and co-location to a wide range of business customers and organizations throughout the
Greater Toronto Area (“GTA”). This agreement will allow Cogeco Cable to further the development
of its business telecommunications activities. For Cogeco Cable, entering the GTA market, the
largest local business telecommunications market in Canada, brings interesting growth
opportunities for the foreseeable future. It provides a unique opportunity to add owned and operated
points of presence throughout the GTA, linked to its other broadband facilities extending over the
dense telecommunications corridor from Windsor to Cornwall in Ontario. On the other hand, the
market will continue to benefit from a real competitive alternative to dominant carriers provided by
THTI as an alternative non-dominant facilities-based carrier. THTI customers will also be able to
benefit from Cogeco Cable’s extensive fibre network spanning Ontario and Quebec.
“This acquisition is another step in the enrichment of the Cogeco Business Solutions Data offering.
THTI’s state-of-the-art network, its dedicated work force and Toronto business market potential
should complement our existing business telecommunications activities in Ontario and allow future
growth for Cogeco Cable in this line of business” said Louis Audet, President and CEO of Cogeco
Cable. “The acquisition of THTI is a unique opportunity to add value for Cogeco Cable’s customers,
shareholders and employees. It also demonstrates our willingness to seize upon external growth
opportunities in our Canadian footprint when they arise and fit well with our business strategy. We
are committed to giving outstanding service to our customers, creating value for our shareholders
and playing an active role in the development of the communities we serve, as well as contributing
to a vibrant Canadian cable telecommunications industry,” added Mr. Audet.
“This sale enhances our ability to invest in the renewal of our distribution system,” said David
O’Brien, President and Chief Executive Officer of Toronto Hydro Corporation.
Cogeco Cable (, a facilities-based telecommunications company offering a diverse
range of services to its customers in Canada and in Portugal is the second largest cable operator in
Ontario, Québec and Portugal, respectively, in terms of the number of Basic Cable service
customers served. Through its two-way broadband networks, Cogeco Cable provides its residential
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and commercial customers with Analogue and Digital Television, High Speed Internet, Telephony
and Data services. The Corporation provides approximately 2,625,000 revenue-generating units
(RGUs) to 2,390,000 homes passed in its Canadian and Portuguese service territories. Cogeco
Cable’s subordinate voting shares are listed on the Toronto Stock Exchange (TSX: CCA).
Toronto Hydro Corporation is a holding company which through its wholly-owned subsidiaries:
Toronto Hydro-Electric System Limited (“LDC”) – distributes electricity;
Toronto Hydro Energy Services Inc. – provides energy efficiency products and services,
and delivers street lighting and expressway lighting services; and
Toronto Hydro Telecom Inc. – leases fibre optic cable capacity and provides data
communication services.
The principal business of Toronto Hydro Corporation is the distribution of electricity by LDC. LDC
owns and operates an electricity distribution system which delivers electricity to approximately
680,000 customers located in the City of Toronto. LDC is the largest municipal electric distribution
company in Canada.
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Information: Marie Carrier
Director, Corporate Communications
Cogeco Cable
Tel.: 514. 764.4700
Mr. Blair Peberdy
Vice-President, Marketing, Communications and Public Affairs and Chief
Conservation Officer;
Pankaj Sardana
VP, Treasurer and Regulatory Affairs
Certain statements in this press release may constitute forward-looking information within the meaning of
securities laws. Forward-looking information may relate to our future outlook and anticipated events, our
business, our operations, our financial performance, our financial condition or our results and, in some cases,
can be identified by terminology such as "may"; "will"; "should"; "expect"; "plan"; "anticipate"; "believe";
"intend"; "estimate"; "predict"; "potential"; "continue"; "foresee", "ensure" or other similar expressions
concerning matters that are not histor ical facts. In particular, statements regarding our future operating results
and economic performance and our objectives and strategies are forward-looking statements. These
statements are based on certain factors and assumptions including expected growth, results of operations,
performance and business prospects and opportunities, which we believe are reasonable as of the current
date. While we consider these assumptions to be reasonable based on information currently available to us,
they may prove to be incorrect. Forward-looking information is also subject to certain factors, including risks
and uncertainties (described in the “Uncertainties and main risk factors” section of the Corporation’s 2007
annual Management’s Discussion and Analysis (MD&A) that could cause actual results to differ materially
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from what we currently expect. These factors include technological changes, changes in market and
competition, governmental or regulatory developments, general economic conditions the development of new
products and services, the enhancement of existing products and services, and the introduction of competing
products having technological or other advantages, many of which are beyond our control. Therefore, future
events and results may vary significantly from what we currently foresee. You should not place undue
importance on forward-looking information and should not rely upon this information as of any other date.
While we may elect to, we are under no obligation (and expressly disclaim any such obligation), and do not
undertake, to update or alter this information before ne xt quarter.
This press release should be read in conjunction with the Corporation’s financial statements, and the notes
thereto, prepared in accordance with Canadian GAAP and the MD&A included in the Corporation’s 2007
Annual Report. Throughout this discussion, all amounts are in Canadian dollars unless otherwise indicated.