Shaw Communications Inc. said Thursday it has sold it stake in Nova Scotia-based cable systems to local operator EastLink, owned by Bragg Communications Ltd., for $220-million.
The deal is part of Calgary-based Shaw's plan to pare down its debt by selling off some assets.
"The sale is beneficial to both parties as EastLink will be able to consolidate its cable holdings in Nova Scotia and Shaw continues to execute its previously announced strategy of monetizing assets ro reduce its level of debt," Jim Shaw, chief executive of Shaw Communications, said.
The agreement is based on a purchase price of $3,300 per subscriber, or roughly 16 times operating income before taxes, depreciation and amortization, for about 80,000 subscribers. The sale is subject to approval by the Canadian Radio-television and Telecommunications Commission.
EastLink Cable Systems is the main cable operator in Nova Scotia and Prince Edward Island.
In December, Shaw offered $1.2-billion in cash and stock for smaller rival Moffat Communications Ltd. in a friendly takeover that continued consolidating the Canadian industry.
Since the acquisition, Shaw said it has entered into agreements to sell $490-million in assets, surpassing the original target of $400-million. The money is earmarked to for debt reduction.
Shaw Communications Inc. is a communications company whose core business is providing broadband cable television, Internet and satellite services to about 2.8 million customers.