Cable Operators

Atlantic Broadband Up for Sale

6/04/2012 12:01 AM Eastern

Atlantic Broadband is the latest midsize
cable operator to test the deal waters, reportedly seeking as
much as $1.4 billion for its operations in several Southern and
Mid-Atlantic states.

Based in Quincy, Mass., Atlantic has about 255,000 customers
and is the No. 14 U.S. cable company.

It operates four main clusters: Western Pennsylvania,
Miami Beach, Maryland/Delaware and Aiken, S.C. It was
formed in 2003 after buying cable systems with about 230,000
customers in those areas from Charter Communications.

Bloomberg News on May 30 reported first-round bids for
the properties were due May 23 and attracted some interest.
Credit Suisse is handling the auction.

Bloomberg did not identify or quantify the bidders, but executives
in the cable financial community speculated they
most likely would be private-equity players. The nearest strategic
cable operator to Atlantic’s properties is Comcast, which
those finance experts said was not expected to bid.

Atlantic Broadband is backed by private-equity funds
ABRY Partners and Oak Hill Capital Management. Its CEO
is David Keefe, and its president and chief operating officer
is Ed Holleran, both cable-industry veterans.

According to people familiar with the process, Atlantic
Broadband could fetch about $1.4 billion, assuming a deal
multiple of 8 to 8.5 times estimated 2012 cash flow of $169
million, in line with previous deals.

Atlantic’s owners last year contemplated an auction process,
but pulled those plans after continued weakness in
the economy, according to people familiar with the company.
Recent sales like Insight Communications for $3 billion
to Time Warner Cable and Knology for $1.5 billion to
WideOpenWest apparently were enough to merit trying
again.

Atlantic completed a $1 billion refi nancing (led by Credit
Suisse) of senior debt in March that paid off some senior
notes and enabled a $345 million dividend to shareholders,
according to public filings.

Officials at Atlantic Broadband did not return phone calls
for comment.

Wave Broadband, with about 325,000 customers in the
Pacific Northwest, also is said to be back on the block, reportedly
seeking as much as $1 billion in an auction process
that is moving forward.

March