In a significant market development, WideOpenWest Inc. (WOW) has agreed to a $1.5 billion all-cash acquisition by DigitalBridge Group Inc. and Crestview Partners, a move that will transition the broadband service provider into a private entity. This transaction, valuing each WOW! share at $5.20, represents a substantial premium of 63% over the stock's closing price on the preceding Friday, triggering a nearly 48% surge in its after-hours trading.
This strategic acquisition represents a pivotal moment for WOW!, a broadband provider headquartered in Englewood, Colorado, serving a vast customer base of close to 2 million consumers across two dozen markets in the Midwest and Southeast regions of the United States. Crestview, already a dominant shareholder with approximately 37% of WOW!'s outstanding shares, is set to roll over its entire stake into the new private equity arrangement, underscoring its continued commitment to the company's future. Teresa Elder, WOW!'s CEO, expressed enthusiasm for the deal, highlighting its positive implications for the company's investors, employees, and customer base.
The offer price of $5.20 per share delivers a 37.2% premium compared to the unaffected price of $3.79, recorded prior to the commencement of acquisition discussions in May 2024. This notable premium reflects the perceived value and future potential that DigitalBridge and Crestview see in WOW!'s assets and market position, despite some recent financial hurdles. This acquisition will allow WOW! to operate outside the scrutiny of public markets, potentially enabling more agile and long-term strategic decisions without immediate pressure from quarterly earnings expectations.
The announcement of the acquisition coincided with WOW!'s release of its second-quarter results, which indicated some financial challenges. The company reported a 9.2% year-over-year decline in total revenue, amounting to $144.2 million, and a net loss of $17.8 million for the quarter. DigitalBridge, a firm with extensive experience in digital infrastructure and managing assets worth $106 billion, views this acquisition as a significant opportunity for expansion and leveraging its expertise to enhance WOW!'s operational efficiencies and market reach. The completion of this intricate acquisition is contingent upon receiving necessary shareholder and regulatory approvals, with projections indicating a closing timeline towards the end of 2025 or early 2026. Once finalized, WOW! will cease trading on public exchanges, marking its transition into a privately-held company.
This substantial acquisition by DigitalBridge and Crestview Partners marks a new chapter for WOW!, positioning it for focused growth and strategic development away from public market pressures, while offering existing shareholders a considerable premium.
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