Ex-Classic Execs Seek Telecom Deals

Just a few months after resigning as CEO of Classic Communications Inc., Merritt Belisle is looking to do some deals.

A deal maker at heart, Belisle left Classic in December, saying the company had no more need for his acquisition-making skill. But earlier last month, Belisle formed Black Creek Group, an investment group with former Classic senior vice president Bryan Noteboom, and is actively in the hunt for rural telephone companies.

Noteboom, who expects to officially resign from Classic at the end of the month, said both he and Belisle had signed noncompete agreements with Classic that prevent Black Creek from making any acquisitions in the cable field.

"We don't want to test that right now," Noteboom said.

But the telephone industry is wide open, and Noteboom said Black Creek already has about four deals pending.

Noteboom said Black Creek is currently seeking financing for the projects. The deals range in value from $4 million to $80 million.

"We don't know if we are going to do this on a project financing basis or roll it all into one," Noteboom said.

Although competitive local-exchange carriers have had problems, Noteboom said there is ample opportunity in the rural local-exchange market. He said Black Creek would pick potential acquisition targets carefully, from profitable Texas, Missouri and Kansas exchanges that are not subject to overbuilding.

Classic won't have operations in Black Creek markets, he said. Black Creek is talking with several banks about financing, he said.

Noteboom said Belisle had tried in the past to buy local exchanges for Classic. In 1995, Classic had a deal to buy four exchanges in Western Kansas owned by Sprint-United Telephone but was thwarted by a local telephone cooperative.

"It's a tight-knit fraternity," he said.

In the past, Belisle used two other Black Creek entities-Black Creek Communications LP and Black Creek Management LLC-as vehicles to buy systems for Classic. Though Black Creek Group has no official ties to Classic, the MSO will have right of first refusal on any telephone acquisitions it makes. Belisle continues to be a large Classic shareholder.

Noteboom would be the third Classic executive to leave the company since November, when president Steve Seach resigned and took a position with a Texas-based venture capital firm, Austin Ventures.