The Tribune

Cable Bahamas yesterday confirmed it had closed one of its four Florida acquisitions, purchasing US Metropolitan Telecom for $23.256 million.

The company, which is the Florida equivalent of Cable Bahamas’ Caribbean Crossings subsidiary, is a fibre optic infrastructure provider whose systems cover an 18 million-strong consumer market and the US’ second busiest tourist region.

“The completion of this acquisition is a significant milestone in our drive to grow and expand our footprint,” said Anthony Butler, Cable Bahamas’ president and chief executive.

“US Metro’s regional fibre optic network dovetails nicely into our own national and international system to create a mesh of connectivity across the major centres of the Bahamas and the metropolitan markets of Central and Southwest Florida.”

Frank Mambuca, US Metropolitan’s divisional president for the southwest region, added: “Florida and the Bahamas have a long and sustained history, and it is exciting to witness that our two IP networks can be connected seamlessly to provide a network that delivers Internet video, voice, data services, SIP trunking, hosted IP PBX, IP VPNs and other cloud services.”

Cable Bahamas made no mention yesterday of its other three Florida purchases - Summit Broadband, Marco Island Cable and NuVu. It did, though, say that government approval had been received for almost $100 million worth of transactions.

This indicates that the Government’s failure to appoint its three representatives to the BISX-listed communications provider’s Board of Directors, prior to the Extraordinary General Meeting (EGM) that saw shareholders approve the acquisitions, has not delayed deal closing - as some had feared.

As previously reported by Tribune Business, the failure to appoint directors prior to the EGM meant two key pre-conditions set by the Government for approval were not met.

These were the requirements that the purchase prices for Marco Island Cable, NuVu, US Metropolitan Telecom and Summit Broadband be “considered and approved” by the Government-appointed directors on Cable Bahamas’ Board.

And the same directors were also required to approve the terms of the payout to deal ‘insiders’, namely Cable Bahamas chairman Philip Keeping and his fellow director, Troy D’Arville, which is to be based on the targeted companies’ performance over 30 months.

Tribune Business understands that the Government has now named and appointed its three Cable Bahamas’ directors.

Phaedra Knowles-Mackey, the National Insurance Board’s (NIB) investments chief, will take NIB’s seat, while Calvin Knowles, chairman of the Bahamas Development Bank (BDB), will take one of the Government’ posts.

This newspaper was told that Cable Bahamas’ Board members, specifically the government appointees, visited the company’s Florida acquisitions within the past two weeks to familiarise themselves with the entities and complete their approvals work.

Tribune Business understands that the closings of the three other Florida deals are set to be announced imminently.

Mr Butler did not return Tribune Business calls seeking further comment before press deadline last night.

Tribune Business previously revealed that Cable Bahamas is predicting its US acquisitions will triple annual revenue and operating income growth rates beyond what it would achieve if its activities remain confined to this nation.

The BISX-listed communications provider, in the proxy form issued to shareholders, forecasts that the acquisitions will see it achieve compound annual growth rates for revenue and EBITDA (operating income) of 9.6 per cent and 11.8 per cent, respectively, for the five years to end-2017.

This compared to revenue and earnings before interest, taxation, depreciation and amortisation (EBITDA) growth forecasts of 2.3 per cent and 4 per cent, respectively, if Cable Bahamas’ remained a Bahamian-centric company as it is now.

Outlining the rationale for its bid to acquire Summit Broadband, Marco Island Cable/Nu Vu and US Metropolitan Telecom, the Cable Bahamas’ proxy projected that by 2017, its Florida interests would account for 31.7 per cent of total EBITDA.

This would equate to $20.5 million, out of Cable Bahamas; total operating income of $64.6 million - a major leap from the $44.1 million the company is projected to earn if it remains 100 per cent concentrated in the Bahamas.

In similar fashion, Cable Bahamas is projecting that its US purchases - if finally consummated - will generate 40.8 per cent of company-wide revenue in 2017.

At that point, the BISX-listed communications provider is forecasting that $86.7 million in revenues will come from Florida, taking the total to $212.6 million - as opposed to the $125.9 million that would be generated if it remained focused solely on the Bahamas.