After more than 50 years as one of the top small independent cable companies in the industry, Bend Broadband has agreed to be acquired by Chicago-based telecom company Telephone and Data Systems, in a deal valued at about $261 million.
Bend, led by president and CEO Amy Tykeson, has been one of the most outspoken small cable operators in the country. Tykeson, who left a job as vice president of area marketing in New York for Home Box Office in the 1980s to return to Bend, Oregon to run the family business, has received numerous industry awards, and was named to the Cable Hall of Fame in 2013.
This is the second cable deal TDS has made in less than a year – in August it closed on the purchase of Baja Broadband, an Alamogordo, N.M.- based operator with about 71,000 video subscribers in Colorado, New Mexico, Texas and Utah, for $267.7 million.
Bend Broadband has about 36,000 video customers, 41,000 high-speed data subscribers and 22,000 digital telephony customers in Central Oregon. It had 2013 revenue of $70 million and has about 280 employees.
The deal, expected to close in the third quarter, also includes two affiliated companies operated by Bend Broadband: Bend Broadband Vault, a Tier III data center providing colocation and managed services, and Zolo Media, a cable advertising and broadcast business.
“Bend Broadband’s strong market position and technology leadership will help us achieve significant forward momentum in our cable strategy,” said TDS Telecom CEO David Wittwer in a statement. “We will leverage Bend Broadband’s considerable expertise across our growing cable business, driving residential and commercial growth by delivering competitive broadband, video and managed services over the high-capacity network. We share BendBroadband’s vision of being a trusted partner to our customers and communities, and growing profitably through quality, service and innovation.”
RBC Capital Markets served as the exclusive M&A advisor to BendBroadband in connection with this transaction. Stoel Rives LLP, Davis Wright Tremaine LLP and Cinnamon Mueller LLC served as legal counsel to Bend Broadband. Sidley Austin LLP served as legal counsel to TDS.
“TDS is a longstanding, family-controlled company that shares our commitment to our customers, our employees and our communities. With TDS, we will keep hundreds of good jobs in Central Oregon,” said Tykeson in a statement. “I am proud of the customer-centered company we have built over 30 years, and I believe TDS is the right fit for our culture and values, and for our future. I want to reassure our customers that there will be no interruption in service, and Bend Broadband will remain a strong partner to our Central Oregon communities.”
Telephone and Data Systems provides wireless; cable and wireline broadband, TV and voice; and hosted and managed services to about 5.9 million customers across the country through its business units, U.S. Cellular, TDS Telecom, OneNeck IT Solutions and Baja Broadband.
“We are building a high-quality cable business that will deliver value over the long term. Bend Broadband’s culture of innovation and its attractive market demographics make it a strategic addition to our cable, broadband and data center portfolio,” said LeRoy Carlson, Jr., president and CEO, Telephone and Data Systems. “We are committed to investing resources in adjacent businesses like cable, where we can leverage our expertise and competencies to support profitable growth.”