American Cable Entertainment Co. LLC, a new cable venture
backed with $50 million in private equity, announced its first system acquisition and
named its backers last week.
ACE, led by president and former Simmons Cable executive
Bruce Armstrong, bought Booth American's 32,000-subscriber Hi-Desert Cablevision. The
price was not disclosed, but an industry source said it was about $2,300 per subscriber,
or some $73.6 million -- the equivalent of around 10 times system cash flow.
Booth American sold most of its domestic cable systems last
year, leaving Hi-Desert, in the Victorville, Calif., area, as an orphan. Communications
Equity Associates Inc. represented ACE.
Later in the week, Waller Capital Corp. announced that it
represented ACE in a private placement of up to $50 million with SG Capital Partners, an
affiliate of French investment bank Societe Generale Securities Corp., and with Providence
Equity Partners Inc., a private investment firm that has long been active in U.S. cable
SG Capital has $400 million in committed capital, and it is
looking for media and telecommunications investments, Waller said.
ACE, based in Stamford, Conn., is one of several start-ups
trying to find available systems at a time when sale prices are high and, according to
buyers and brokers, when not many systems are on the market.
In addition to Hi-Desert, ACE is believed to be close to
buying a nearby Southern California system of about the same size. ACE also manages 24
cable systems, formerly owned by Scott Cable Communications, with about 78,000 subscribers
scattered across 10 states.
Armstrong said last month that ACE hopes to acquire 300,000
to 500,000 subscribers.
"We're out shopping, trying to fill the
cart," he said, adding that he probably wouldn't be looking for large urban
systems, since "that's not our expertise."