Cebridge Communications, the St. Louis-based MSO run by Cequel III chairman Jerry Kent, said it has obtained commitments for about $125 million in new equity and refinanced its debt with a new $350 million credit facility — moves it said will help create a war chest for new acquisitions.
The equity commitments come primarily from Goldman Sachs Capital Partners. Cebridge said Oaktree Capital Management LLC — a Los Angeles-based money manager — continues to be Cebridge's controlling shareholder. The amount of equity Goldman would receive was not disclosed.
The debt refinancing was syndicated by Goldman Sachs Capital Partners and RBC Capital Markets. While terms were not disclosed, Cebridge said the credit facilities were significantly oversubscribed, prompting the company to increase the $325 million it originally sought.
Cebridge has about $325 million in debt, according to spokesman Pete Abel, and the remaining $25 million would be contained in an undrawn revolving loan. Abel added that a portion of the $125 million in equity commitments would be used for upgrades and a portion for acquisitions.
"The market has reaffirmed the value of our broadband systems, its support for our growth plans, and the talent and vision of our management team," Kent said in a statement. "We now have the balance sheet and flexibility we need to invest in our infrastructure and develop a strong, competitive broadband enterprise."
Cebridge has identified at least three properties that it could acquire in the near term, said Abel, but he declined to reveal their names. He added that the acquisitions would be similar to its current system holdings.
"Some will be clustered in and around our current systems," Abel said. "Hopefully, we will be spreading out into a few more states as well.
Cebridge has about 420,000 subscribers, mostly in secondary markets. Cequel began bulking up its cable presence with a deal to manage Classic Communications Inc., which has 325,000 customers in Texas, Kansas, Oklahoma, Missouri, Arkansas, Louisiana, Nebraska, New Mexico, Colorado and Ohio.
Cequel also owns a small equity interest in Classic. Also last year, Cequel acquired about 27,000 subscribers in the Houston area from Shaw Communications Inc. for $85 million. In January, Cequel closed on the purchase of 78,000 subscribers from Alliance Communications and entered into an agreement to acquire 13,000 customers from Thompson Cablevision.
Cebridge has spent most of the past year upgrading its cable properties — it said that its goal is to make high-speed data service available to 80% of its customers by the end of 2004. Last year, those upgrades and new services launches helped Cebridge double its high-speed data customer base from 20,000 to 40,000.