Denver-based Champion Broadband, helmed by former WideOpenWest executives Mark and David Haverkate, have agreed to buy financially strapped Los Angeles area overbuilder Altrio Communications Inc.
The sum was undisclosed, but overbuilds often sell for much less than incumbent cable systems, which have been selling for as much as $4,000 per customer of late.
Altrio officials haven't disclosed customer counts.
Altrio CEO Dave Rozzelle confirmed last week that his company's board accepted a buyout offer and will sell the operation, rather than shuttering and dismantling it.
Altrio launched in 2001, gaining its first franchise in Arcadia and quickly earning operating authority in Pasadena, Monrovia, Temple City, Sierra Madre, Altadena and one franchise area in Los Angeles. It hoped to build its fiber-to-the-home architecture out to 427,000 households.
To date, it's completed only part of the build to areas of Pasadena and Arcadia.
Altrio's plan was to offer triple-play bundles of voice, video and data service throughout the area, in competition with Charter Communications Inc. and Adelphia Communications Corp. But due to a regulatory snafu, Altrio is currently authorized only to offer telephony in Pasadena.
Altrio laid off most of its non-customer service staff last October and stopped installing new subscribers. Executives said the venture was out of cash.
Mark Haverkate said he approached Altrio in early March when he heard it might be dismantled, offering the board an alternative to shutting down the business. But he was later told there were other bidders and Champion's offer wasn't the highest.
The Haverkate brothers thought they were out of the deal picture when Altrio reapproached them a few days ago and asked them if their offer still stood.
"Champion is going to step in and take over and hopefully turn this into a successful operating entity," Mark Haverkate said, adding that Champion would pay for the acquisition with internal funds.
It's not within Champion's abilities to resume the buildout right now, Haverkate said. But he's been making the rounds, meeting with the holders of unfinished municipal franchises, some city officials said.
Champion was formed in 2003 after Haverkate left overbuilder WideOpenWest and negotiated to buy WOW's original overbuild, serving parts of Denver and Lakewood, Colo. It now serves just under 3,000 customers, providing video and high-speed data services in competition with Comcast Cop., Haverkate said.
Haverkate said he expects to close the deal in a couple of weeks. Local franchising approvals are required.