Investment Funds Buying Out WideOpenWest
Regulatory approval of cable ISP WideOpenWest going private should be "relatively straightforward," UBS analyst Batya Levi told us Tuesday. WOW announced the $1.5 billion all-cash deal with investment funds DigitalBridge and Crestview Partners after the market's close Monday. The transaction should close by year-end or in Q1 2026, with shareholder and regulatory approval to come, WOW said.
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Jonathan Friesel, DigitalBridge's fiber chief, said it plans to expand and upgrade 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."
Crestview President Brian Cassidy said bringing in DigitalBridge helps "support WOW!'s long-term strategy, including geographic expansion and network technology upgrades." Crestview is WOW's single largest shareholder.
WOW said in May 2024 that it had received an unsolicited bid from DigitalBridge and Crestview for $4.80 a share. The $1.5 billion deal is for $5.20 a share.
WOW's most recent quarter saw decreases in its broadband, video and telephony subscribers, as well as revenue, it said. It ended Q2 with 462,000 broadband subscribers, versus 485,000 in Q2 2024, and 67,000 landline subscribers, compared with 75,700. WOW -- which is phasing out its traditional video service in favor of YouTube TV (see 2305150027) -- said it had 42,500 video subscribers at the end of Q2, down from 71,600 the same time a year ago.
In a call with analysts Monday, WOW CEO Teresa Elder said the company lost 3,900 broadband subscribers in Q2, with some additions in greenfield and expansion markets partially offsetting the drop in its legacy footprint. She said those greenfield subscriber additions and better subscriber dynamics in its legacy market mean WOW is "significantly closer" to returning to net growth of its broadband subscribers. Steps WOW took in 2024 helped, including complimentary speed upgrades and simplified pricing, she added.
Elder also said the video subscriber losses were expected and will continue as WOW further transitions to YouTube TV.
WOW CFO John Rego said the decline in Q2 revenue -- $144.2 million, down from $158.8 million in Q2 2024 -- was driven largely by big drops in video and telephony revenue.
In a note to investors, UBS' Levi said WOW revenue for 2025 would likely be down 8%, but broadband subscriber losses for the year would probably be around 12,000 -- an improvement over the 20,000 lost in 2024.