Summit to Listen to Purchase Offers3/01/1998 7:00 PM Eastern
Summit Communications Inc., a privately owned MSO focused
on the Pacific Northwest, has retained Waller Capital Corp. to advise it on selling or
recapitalizing its cable business.
Summit, founded 25 years ago by its president, James
Hirshfield, is fielding offers at a time when the market for cable systems is very strong.
Summit has 42,000 basic subscribers in systems that pass 70,000 homes. One system -- in
downtown Seattle, near Summit's Bellevue, Wash., base -- serves 14,000 subscribers
from a single headend, and it enjoyed 15 percent growth last year, Waller partner Joseph
"It's a tremendous opportunity to own a very
large cluster of fast-growing subscribers," Duggan said.
In a statement, Hirshfield cited the "significant
capital investment" needed to accommodate rapid growth. He said Summit wants to work
with Waller on "the best way to finance this growth."
While most system-sale activity lately has been from
companies looking to rationalize but stay in the business, some small entrepreneurs with
long track records have chosen to sell out. Sonic Communications, owned by Chris Cohan,
who also owns the National Basketball Association's Golden State Warriors, decided to
sell his systems with about 117,000 subscribers to Charter Communications Inc. in August.
That deal is expected to close soon.
Duggan said he expected significant interest in Summit.
Interestingly, he said, preliminary inquiries have already
come from private-cable operators. One of the leading private-cable firms is Cable Plus,
which is also based in Bellevue. Those companies, which focus on multiple-dwelling-unit
properties, have become increasingly tough competitors to cable. Summit has begun to focus
on those customers, as well.
Tele-Communications Inc. already owns most of the Seattle
cluster, but it's unclear if a sale to TCI would raise antitrust issues.
Summit's Seattle system represented a shift for the
company away from serving mostly rural areas to more densely populated markets. And in
October, the Bellevue City Council gave Summit a cable franchise to compete against TCI.
Summit said at the time that it expected to begin service in MDU complexes in
Bellevue's downtown area, using a new, two-way, fiber-based system.
Outside of Washington, Summit's systems are in Idaho