How Subs Sell For $4,600 Per
by Mike Farrell -- Multichannel News, 12/16/2007 7:00:00 PM
The Deal:
Sacramento, Calif.-based SureWest Communications agreed to buy Kansas City, Mo.-based overbuilder Everest Broadband for $173 million in cash.
The Significance:
Given Everest’s 37,500 basic customers, the deal works out to be more than $4,600 per subscriber, one of the richest valuations for a cable company in years.
Comparables:
Overbuilder WideOpenWest sold in 2005 for about $2,200 per subscriber and Adelphia Communications sold in 2006 to Time Warner and Comcast about $3,600 per subscriber ($17.6 billion).
The Logic:
SureWest pegs the deal at $3,700 per customer, based on the mix of Everest customers. Everest has a strong commercial business — 1,600 customers — generating an average $670 per month in revenue, or about six times the $107 from residential subscribers.
The $3,700 per-subscriber figure is for “residential equivalent” subscribers, multiplying the commercial customers by six and adding it to the total subscriber numbers. The total residential equivalents is 47,100 customers.
Everest Broadband Takes On SureWest Brand
07/08/2008SureWest Serves Up New Customer Site
12/09/2008Grande’s On The Block
01/17/2008SureWest Scales Everest For $173 Million
12/06/2007
