Former Millennium Digital Media executive Steven Weed is officially back in cable, raising about $70 million in part to purchase cable systems in Washington state with a combined 22,000 subscribers.
Weed purchased the systems through Wave Broadband, a company he set up in late 2001 to acquire cable properties.
New York based investment banker DH Capital LLC helped Wave Broadband raise the money — $32.5 million in private equity from Sandler Capital Management, a New York investment bank, and $37.5 million in senior debt commitments from Wells Fargo Bank and US Bank of Washington.
Denver cable investment banker Daniels & Associates represented Northland.
Terms of the deals were not released, but industry observers estimated the systems were worth $1,800 to $2,000 per subscriber, or about $39.6 to $44 million. Other funds would go for upgrades and other acquisitions.
Northland sold properties in Camano Island, Bayview, Sequim, Clallam Bay, La Conner and Port Angeles, Wash.
Cedar Communications sold systems in Big Lake, Cheney and Lake Goodwin, Wash.
These are the first cable buyout deals for Weed, who left Millennium in February 2002.
A 14-year industry veteran, Weed ran Millennium's 70,000-subscriber Seattle system for four years. Prior to that, he served for about 10 years as chief operating officer and CEO of Summit Communications, which had owned that system. Weed sold Summit to Millennium in 1999.
DH Capital principal Joseph Duggan said the Cedar systems are already two-way capable and provide some high-speed data services. Wave intends to rebuild the Northland systems and launch data services as well.
Weed is the latest entry in what is becoming a growing list of former cable operators rejoining the business. Others: Jerry Kent, who through Cequel III has done a flurry of cable deals in the past few months; Bresnan Communications Inc. president Bill Bresnan; Steve Simmons; and Dan Ryan.
Bresnan recently completed the purchase of about 317,000 subscribers in Montana, Wyoming, Utah and Colorado for an estimated $675 million. Simmons, former head of Simmons Communications Inc. purchased RCN Corp.'s 80,000-subscriber Princeton, N.J. system earlier this month for about $289 million. Ryan, a former regional vice president for Charter Communications Inc., has purchased some small systems last year through his new company, Precis Communications.
"Not only are you seeing ex-cable guys coming back, you're seeing a bunch of smart cable guys coming back," Duggan said.