Sacramento, Calif.-based SureWest Communications agreed to buy Kansas City, Mo.-based overbuilder Everest Broadband for $173 million in cash.
Given Everest’s 37,500 basic customers, the deal works out to be more than $4,600 per subscriber, one of the richest valuations for a cable company in years.
Overbuilder WideOpenWest sold in 2005 for about $2,200 per subscriber and Adelphia Communications sold in 2006 to Time Warner and Comcast about $3,600 per subscriber ($17.6 billion).
SureWest pegs the deal at $3,700 per customer, based on the mix of Everest customers. Everest has a strong commercial business — 1,600 customers — generating an average $670 per month in revenue, or about six times the $107 from residential subscribers.
The $3,700 per-subscriber figure is for “residential equivalent” subscribers, multiplying the commercial customers by six and adding it to the total subscriber numbers. The total residential equivalents is 47,100 customers.