With a deal to sell off about 70,000 subscribers on the scrap heap, Millennium Digital Media has decided to focus on rebuilding its plant and pursuing new acquisitions, upping longtime president Kelvin Westbrook to chairman and chief strategic officer and hiring former Cebridge Connections (now Suddenlink Communications) president and chief operating officer William Shreffler as president and CEO.
WAVE DEAL WAS SET
Millennium had an agreement to sell off about 70,000 of its 120,000 subscribers in February to Wave Broadband, the Kirkland, Wash., cable company headed by former Millennium executive Steve Weed. That deal, however, was scrapped in favor of recapitalizing the company in early August, according to Millennium Digital senior vice president of marketing Peter Smith.
Smith would not give details on the company’s recapitalization, adding Millennium is privately owned.
Executives in the cable finance community said most of Millennium’s debt was purchased by New York-based hedge fund Trimaran Capital Partners and Stamford, Conn.-based distressed-debt investor Black Diamond Commercial Finance.
It was those investors who decided to nix the Wave Broadband deal, mainly because they thought they could get a higher price, those executives said.
Wave was set to acquire Millennium systems in Washington, Oregon and Michigan for $150 million to $200 million. Excluded was Millennium’s 44,000-subscriber system in Anne Arundel County, Md., which competes with Comcast Corp.
The buy was expected to be sort of a homecoming for Weed, who ran the Seattle system for Millennium before striking out on his own with Wave Broadband in 2002. Weed did not return a phone call for comment.
One person in the cable financial community familiar with the failed Wave deal said Weed had already secured franchise transfers for the properties and believed that a deal was in the bag.
In hiring Shreffler and promoting Westbrook, Millennium, at least for now, appears to be no longer pursuing a sale. Smith said the strategy is actually to acquire more systems and upgrade its plant. “We are definitely out there and talking to people looking for opportunities to grow the business,” Smith said.
Millennium systems are in Washington, Oregon, Maryland and Michigan.
“Ideally [the goal] would be [to grow] several times our existing size,” Smith said. “I think the upside is based on the resources to do it and the availability of properties at the right price.”
Smith wouldn’t say how much capital is being committed to upgrades and acquisitions, but said Millennium is confident it will have sufficient funding.
Shreffler had been senior vice president of Charter Communications Inc.’s Midwest division before joining Cebridge in 2003. He left Cebridge later that same year, forming Home Boulevard LLC, an executive-relocation service.
SYSTEMS ARE 'FIXER-UPPERS’
Back in February, when the Wave Broadband deal was disclosed, Weed said that the Millennium properties were “fixer-uppers” — most of the systems were between 450-Megahertz and 550-MHz capacity and only half had access to high-speed Internet service.
The addition of Shreffler, a 21-year cable veteran, should give Millennium additional operations expertise while it determines its future, the executives in the cable finance community said.
“I think they are continuing to look at what their options are,” said one executive in the cable-finance community. “Hedge funds are holding the debt and they’re shorter-term investors.”