Testing System Sale Temps


Another small-market cable
operator decided to test the deal waters last
week, with independent operator St. Joseph
Cablevision hiring Denver-based cable investment
banker RBC Daniels to explore a
possible sale.

St. Joseph Cablevision, founded in its
namesake Missouri town in 1965 by the
Bradley family, has about 85,000 residential
and commercial customers in Arizona and
California. It would be the fourth smallmarket
operator to hit the sales block in
about four months.

Earlier this month, West Point, Ga.-based
overbuilder Knology completed its purchase
of Sunflower Broadband for about
$165 million. That came after Shenandoah
Telecommunications’ August purchase of
Jet Broadband for $148 million and Cablevision
Systems’ June announcement that it
would purchase Bresnan Communications
for about $1.365 billion.

St. Joseph Cablevision is about in the middle
of the pack compared to those other
systems — Sunflower has about 40,000
basic-video customers; Jet has about 60,000
revenue-generating units; and Bresnan
leads the list with more than 300,000 customers
— and, like its peers, operates in
secondary markets.

St. Joseph Cablevision is owned by
News-Press Gazette, which also controls
newspapers in Kansas and Missouri and
broadcast-television stations in Colorado,
Texas, California, Arizona and Oregon. The
TV stations and newspapers, as well as its cable
news and weather channel News-Press 3
Now, are not part of the proposed sale.

According to an article in its own St. Joseph
News-Press, an active buyer’s market
prompted NPG’s decision to weigh offers for
the systems.

Miller Tabak media analyst David Joyce
said the deal market has opened up for smallmarket
operators for a number of reasons, including
more favorable credit markets, low
interest rates that allow for decent exit multiples
for current owners and the re-entry of
private-equity firms in to the deal landscape.

While it is too early to tell who would buy
the systems, Joyce said a strategic buyer
shouldn’t be ruled out.

“Strategic buyers could make sense as well
if the St. Joseph deal is roughly contiguous
with currently owned systems,” Joyce said.


St. Joseph Cablevision has systems in
Flagstaff, Sedona, Lake Havasu City,
Kingman, Parker, Bullhead City and Payson
in Arizona and Blythe and Mammoth
Lakes in California. That would mean
that larger operators like Comcast (which
has systems in Tucson, Ariz.); Cox Communications
(which has systems in Phoenix
and southern Arizona); and CableOne
(which has systems in Prescott, Winslow
and other Arizona cities) could be potential

According to the report in the News-Press,
preliminary information on the systems has
been sent to about 35 interested parties. If
the systems are sold, NPG hopes to close the
deal by the first quarter of 2011.