Atlantic Broadband Closes Buy of Ex-Charter Subs3/07/2004 7:00 PM Eastern
There’s a new top-20 MSO on the list, now that Atlantic Broadband has closed its deal to buy systems with about 230,000 subscribers from top-four MSO Charter Communications Inc.
The start-up, formally called Atlantic Broadband Finance LLC, swiftly closed its $735 million purchase of the systems in and around Miami Beach, Fla., and in Western Pennsylvania; Maryland; Delaware and West Virginia, with a purchase of 2,600 customers in New York state closing separately.
The deal was reached last September. Daniels & Associates represented Charter, which called the sale “part of a longer-term strategy to dispose of non-strategic assets.”
About 270 franchises are covered, of which about 160 were required to approve the transfer, vice president of government and regulatory affairs Donna Garofano said.
Atlantic Broadband — inheriting about 450 employees — is headed by former Continental Cablevision Inc. executives David Keefe (CEO) and Ed Holleran (president).
Charter had upgraded most of the systems to 750-Megahertz capacity or higher, but hadn’t necessarily taken the next step of heavily marketing digital video and high-speed Internet services everywhere. “It’s really a good platform” with opportunities to upsell customers and add revenue, Holleran said.
The Maryland and Delaware systems are at 450 MHz and don’t have data service, so those will need to be upgraded. As for future services, Holleran said Atlantic would be introducing digital video recording set-tops from Scientific-Atlanta Inc. and Motorola Inc. before rolling out video-on-demand.
Atlantic Broadband’s key financial backers are ABRY Partners, Oak Hill Capital Partners and Merrill Lynch & Co.
Financing broke down as $270 million in equity and $545 million in debt, consisting of senior notes and high-yield bonds. Holleran said the junk bonds carry an interest rate of 9.375% while the senior financing rate was “in the fours.”
In addition to Holleran and Keefe, key executives include chief technical officer Al Kuolas, chief financial officer Pat Bratton and human-resources chief Tom Roundtree.
David Dane is vice president and general manager of the Pennsylvania region, which includes West Virginia; Steve Grossman oversees the Maryland and Delaware systems and Keefe is overseeing the Florida systems until a general manager is hired.