Cogeco Câble inc.

June 13, 2008 16:00 ET

Cogeco Cable Acquires Toronto Hydro Telecom Inc.

MONTREAL, QUEBEC--(Marketwire - June 13, 2008) - Cogeco Cable Inc. (TSX:CCA), the second largest cable telecommunications operator in Ontario, Quebec 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, Quebec 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 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.


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 historical 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 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 next 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.

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