New York-based private-equity firm Crestview Partners, an early investor in Charter Communications, has turned its eye toward overbuilders, investing $125 million in Wide Open West.
WOW has about 782,000 subscribers, mostly in the Midwest. Crestview is purchasing the interest from Avista Capital Partners and other investors. Avista, a New York-based private equity firm, purchased its interest in WOW in 2006 for $800 million.News of the deal was first reported in the Wall Street Journal, which said Crestview will end up with a 35% stake in the overbuilder.
As part of the investment, Crestview partner and Marcus Cable founder Jeffrey Marcus will become chairman of WOW, replacing Colleen Abdoulah, who will retire and remain on the board of directors. Marcus has a long history in the cable industry – he founded Marcus Cable, grew it to 1.1 million subscribers and in 1998 sold it to Microsoft co-founder Paul Allen for $2.8 billion. Allen went on to purchase Charter Communications and several other operators before leaving the company shortly after it emerged from bankruptcy in 2009.
"We are delighted to be partnering with Crestview on this investment. WOW has grown substantially by diversifying its product offering, expanding into new markets, and continuing to provide a differentiated experience to customers,” Avista co-managing partner and president David Burgstahler said in a statement. “This investment will enable WOW to capitalize on additional growth opportunities. We look forward to working closely with incoming Chair of the Board, Jeff Marcus, and want to thank Colleen Abdoulah for her outstanding leadership and service to WOW."
Marcus, who leads Crestview's media practice, said in a statement that the WOW investment is Crestview’s fourth since its founding in 2004. “We know this industry quite well and believe, through this new partnership and given our extensive experience, we can help drive additional value creation while continuing to build on WOW's outstanding customer experience," he continued.
Marcus and Crestview were investors in Charter during the bankruptcy, mostly by purchasing debt. The company sold its Charter stake in 2013, around the time of Liberty Media’s $2.6 billion purchase of 27% of Charter stock that year. Marcus also exited Charter’s board of directors in 2013.
In addition to Charter, Crestview had owned stakes in Insight Communications (which was sold to Time Warner Cable in 2012) and Puerto Rico cable operator One Link Communications (sold to Liberty Global in 2012).
"We are tremendously excited to welcome Crestview Partners, a highly respected firm with extensive experience in the telecommunications industry, to the WOW! family. The investment by Crestview, together with the continued support of Avista, will help WOW to further capitalize on future growth opportunities while continuing to deliver the award-winning customer experience for which we are known. We look forward to a highly successful partnership with Avista and Crestview," said WOW CEO Steven Cochran in a statement.
Credit Suisse acted as financial advisor and Kirkland & Ellis LLP acted as legal advisor to WOW! and Avista in connection with the transaction.
Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal advisor to Crestview in connection with the transaction.