Millennium Digital Media Holdings LLC, a St. Louis-based
MSO created by former Charter Communications executives, has hammered out its second cable
deal, this time gaining 43,000 subscribers in three Northwestern states from Summit
Terms of the purchase were not disclosed.
Summit is the second MSO that Millennium has purchased
since it was formed in May 1997 by chairman Charles Payer, president and CEO Kelvin
Westbrook, vice chairman and chief financial officer Jeffrey Sanders and vice chairman and
chief operating officer John Brooks.
Millennium's first purchase was in 1998, when it
bought a 54,000-subscriber, mostly overbuilt system in Anne Arundel County, Md., from
The Summit deal also involves an overbuilder: Summit has
systems in downtown Seattle, where it competes against AT&T Broadband & Internet
Services (formerly Tele-Communications Inc.), and in nearby Bellevue, Wash., as well as in
Idaho and Oregon.
The Seattle-area systems, which have about 19,000
subscribers, are being upgraded to 750 megahertz, and they will soon offer high-speed
Internet service, said Joseph Duggan, a partner at Waller Capital Corp., which represented
The Seattle systems are also located near software giant
Microsoft Corp.'s headquarters in Redmond, Wash., and near aircraft manufacturer The
Boeing Co.'s headquarters in Seattle.
"There are some pretty compelling demographics and
income [in that area]," Duggan said.
Sanders said the deal fit with the company's strategy
of focusing on the top 50 metropolitan markets in the country.
"This was a great opportunity to operate in a superior
market in Seattle," Sanders said.
The Seattle system's upgrade to 750 MHz should be done
in the next 18 months, Sanders said, adding that Summit had started a rather elaborate
beta-test of a high-speed Internet service in Seattle that Millennium hopes to expand into
Millennium currently offers high-speed Internet access
through High Speed Access Corp. in its Maryland system. The Seattle operation had been
testing high-speed data with Verio Inc.
"We need to sort that out," Sanders said.
Millennium also expects to close its third deal later this
month: its purchase of 42,000-subscriber Horizon Cable Inc. in Lansing, Mich.
However, one deal that has been anticipated since last year
-- Millennium's reported purchase of Tyler, Texas-based MSO Buford Television -- is
still on hold.
Although Millennium would not comment on Buford, one source
familiar with the deal said it is moving forward, but slower than expected.
Millennium had planned to buy just a portion of Buford --
about 72,000 subscribers -- but the deal now appears to include all of Buford's
"[Buford] wants to sell 100 percent of the company on
a cash-for-stock basis," said the source, who requested anonymity.
The source added that a deal could be reached in as soon as
two to three weeks.
Buford has about 178,000 subscribers, primarily in rural
areas. Although this would seem to fly in the face of Millennium's strategy to
operate systems in major markets, about two-thirds of Buford's subscribers are within
30 miles of large or midsized markets, such as Dallas or Houston.
Buford also has a modern, 24-hour call center that was
designed so that it could be scaled up to serve 2 million subscribers. Some observers have
said that the call center is one of the more attractive assets of the company.
Brothers and cofounders Robert and Jeff Buford put the MSO
on the block last year, hiring New York-based investment banker Donaldson, Lufkin &
Jenrette Inc. to find a buyer.