Charter Communications Inc. said it has reached an agreement to sell systems
in six states with about 235,000 subscribers to Atlantic Broadband LLC for $765
million in cash.
The deal is part of an earlier plan by Charter to divest as many as 600,000
subscribers in nonstrategic systems to help pay down debt.
Earlier in the year, the MSO sold systems in Port Orchard, Wash., to
WaveDivision Holdings LLC for about $91 million, or some $3,600 per
In a statement, Charter CEO Carl Vogel said the proceeds of the sale --
expected to close in the first half of 2004 -- will be used to "repay bank debt
and fund future capital expenditures."
Charter has about $19 billion in debt, and it scuttled a planned high-yield
bond offering for about $1.7 billion last month, citing unfavorable bond
The Atlantic deal works out to about $3,255 per subscriber and includes
Charter’s Miami Beach, Fla., system, with about 51,000 subscribers, and 184,000
customers in systems in Pennsylvania, Maryland, Delaware, New York and West
Virginia. The systems also have about 79,000 digital and 33,000 high-speed-data
According to sources familiar with the deal, the Miami Beach system was the
most attractive and garnered a $4,000-per-subscriber price, or about 11 times
cash flow. The source said the bulk of the high-speed-data and digital customers
are located in Miami Beach, although about 61% of the systems are
Atlantic Broadband Finance was formed by Boston private equity firm ABRY
Partners LLC and private investors David J. Keefe and Edward T. Holleran Jr. to
acquire upgraded cable systems.
ABRY has been involved in the cable industry for years, and it has made
investments in Avalon Cable (which sold its Michigan and Massachusetts systems
to Charter in 1999) and overbuilder WideOpenWest LLC
Holleran is a former Continental Cablevision Inc. executive, and he was
president of American Broadband Inc., an overbuilder that ran into difficulty
Keefe started in the cable industry in 1972 as branch manager of Cox
Communications Inc.’s Quint Cities Cablevision and was most recently chief
operating officer of Horizon do Brazil, a Brazilian cable operator.
Denver-based cable investment banker Daniels & Associates represented
Charter in the transaction.