DEFA14A: WOW! Goes Private in $5.20/Share DigitalBridge/Crestview Deal

WideOpenWest, Inc. (WOW!) announced an agreement to be taken private by investment funds affiliated with DigitalBridge and Crestview Partners for $5.20 per share.

Summary

• WOW!'s board of directors, acting on the recommendation of a special committee of independent directors, approved an agreement to be taken private by investment funds affiliated with DigitalBridge and Crestview Partners.
• Upon the close of this transaction, WOW! will become a privately held company, and its stock will no longer be traded on the New York Stock Exchange.
• The final negotiated price is $5.20 per share, representing a premium over WOW!'s recent trading price.
• DigitalBridge is a global digital infrastructure investment firm, and Crestview Partners is a private equity investment firm and a significant stakeholder in WOW! since 2015.
• The transaction is expected to close by the end of 2025 or in the first quarter of 2026, subject to stockholder and required regulatory approvals.

Sentiment

Score: 8

Explanation: The sentiment is highly positive from the company's perspective, emphasizing growth, investment, and a premium for shareholders. The risks are standard for such transactions but do not overshadow the announced benefits.

Positives

• The transaction represents an important step toward fulfilling WOW!'s vision for growth and evolving the business.
• The $5.20 per share price is a premium over WOW!'s recent trading price, providing a positive outcome for stockholders, including employees with stock grants.
• DigitalBridge and Crestview Partners view this acquisition as strategic to their growth and expansion, indicating future investment.
• The acquisition is framed as a story of investment and growth, providing opportunities for the company.

Risks

• Completion of the transaction on anticipated terms and timing, or at all, including obtaining required stockholder and regulatory approvals, and satisfaction of other closing conditions.
• Potential litigation relating to the transaction against DigitalBridge, Crestview, WOW!, or their affiliates, directors, managers, or officers.
• Disruptions from the transaction, including diversion of management's attention from ongoing business operations, harming WOW!'s business.
• Ability of WOW! to retain and hire key personnel in light of the transaction.
• Potential adverse reactions or changes to business relationships resulting from the announcement or completion of the transaction.
• Potential business uncertainty, including changes to existing business relationships, during the pendency of the transaction affecting financial performance.
• Certain restrictions during the pendency of the transaction impacting WOW!'s ability to pursue certain business opportunities or strategic transactions.
• Significant transaction costs, including the possibility of the transaction being more expensive than anticipated.
• Occurrence of any event, change, or circumstance that could lead to termination of the transaction, potentially requiring WOW! to pay a termination fee.
• Risk that WOW!'s stock price may decline significantly if the transaction is not consummated.

Future Outlook

The transaction is expected to close by the end of 2025 or in the first quarter of 2026, subject to the satisfaction of closing conditions, including stockholder and required regulatory approvals. The company anticipates continued investment and growth under private ownership.

Management Comments

• "This is a story of investment and growth, and provides us all with a lot of opportunities."
• "This transaction is an important step toward fulfilling our vision for growth and for evolving the business."
• "The decision to agree to this purchase came after months of thoughtful consideration and negotiation by the special committee of the board and approval by WOW!'s full board of directors."
• "We are confident this move is the right one for WOW!."
• "Throughout this process, we have and will continue to carefully consider the impacts on employees, customers and investors."
• "It is important we continue to do what we always do...WOW! our customers with our award-winning products and services."

Industry Context

The acquisition of WOW! by DigitalBridge, a global digital infrastructure investment firm, and Crestview Partners, a private equity firm, aligns with a broader industry trend of private equity and infrastructure funds investing in essential digital infrastructure assets like broadband. This reflects a belief in the long-term growth potential and stable cash flows of connectivity providers, often seeking to optimize operations and expand networks away from public market scrutiny.

Corporate Governance

Legal Proceedings

• Potential litigation relating to the transaction could be instituted against DigitalBridge, Crestview, WOW!, or their respective affiliates, directors, managers, or officers.

Related Party Transactions

• Crestview Partners, a private equity investment firm, is a significant stakeholder in WOW! since 2015 and is one of the affiliated investment funds acquiring the company.

Stakeholder Impact

• Shareholders: Will receive $5.20 per share, representing a premium over recent trading prices.
• Employees: Assured of investment and growth opportunities, with leadership committing to open communication regarding roles and impacts.
• Customers: Management emphasizes continuing to provide award-winning products and services and a best-in-class broadband experience.
• Investors: The company will become privately held, and its stock will be delisted from the NYSE, impacting public market investors.

Next Steps

• WOW! will file a proxy statement on Schedule 14A with the SEC.
• WOW!, affiliates of WOW!, DigitalBridge, and Crestview intend to jointly file a transaction statement on Schedule 13E-3 with the SEC.
• Promptly after filing, WOW! will mail or provide the definitive proxy statement, Schedule 13E-3, and a proxy card to stockholders.
• Stockholder approval is required for the transaction to close.
• Required regulatory approvals must be obtained for the transaction to close.
• The transaction is expected to close by the end of 2025 or in the first quarter of 2026.

Key Dates

Recommendation

For existing shareholders, the recommendation is to hold shares until the transaction closes to receive the agreed-upon cash consideration of $5.20 per share. Selling before closing might result in a slight discount to the offer price, while holding guarantees the full acquisition price upon successful completion. For new investors, a 'NA' recommendation is appropriate as the company is going private, eliminating long-term public market investment opportunities.

Keywords

WideOpenWest, WOW!, DigitalBridge, Crestview Partners, Take Private, Merger, Acquisition, Broadband, Digital Infrastructure, NYSE Delisting, Stockholder Approval, Regulatory Approval