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2017 M&A kicks off with a new buyer in communications

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2017 M&A kicks off with a new buyer in communications

SNL Kagan's Chart Watch examines merger and acquisition activity in the media, new media and communications sectors in January.

A communications company previously seen as a potential acquisition target took a seat at the buyer's table with a deal announced in January.

Cable One Inc. struck an agreement to acquire Rural Broadband Investments LLC, which operates the rural cable operator known as NewWave, at a deal value of $735.0 million. The transaction marked Cable One's first acquisition since it was spun out of Graham Holdings Co., formerly the Washington Post Co., in 2015.

Despite speculation that it might be bought by a larger cable operator, Cable One had been suggesting in recent months that it wanted to be a buyer. In December 2016, Cable One CFO Kevin Coyle said at an investor conference that the company had "a lot of capacity" and was "active in looking at [M&A] opportunities, whether they be cable opportunities like we have today, or whether they be cable-related in the fiber business."

NewWave serves customers in non-urban areas of Arkansas, Illinois, Indiana, Louisiana, Mississippi, Missouri and Texas. A combined Cable One and NewWave would include more than 10,500 network plant miles and over 3,700 fiber miles.

The month's other communications deal came from Mediacom Communications Corp., which announced its acquisition of Andy Cable at an estimated deal value of $61.2 million on the same day as the Cable One-NewWave announcement.

The communications sector's two announced deals in January 2017 had aggregate deal and transaction values of $796.2 million. The prior month also saw just two deals in the sector, but with an aggregate transaction value of $1.44 billion and an aggregate deal value of $570.3 million. Looking further back, 2016 saw a livelier start to communications M&A, with 16 deals in January 2016, but transaction and deal values were not disclosed.

Meanwhile, the media and new media sector saw 45 deals in January 2017 with aggregate deal and transaction values of $46.2 million, compared to 52 deals in December 2016 with aggregate deal and transaction values of $15.2 million. The early 2017 M&A activity in media pales in comparison to January 2016, which saw 117 deals with an aggregate transaction and deal value of $8.24 billion and $6.03 billion, respectively.

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