Ex-MSO Rapid Buys Back Into Cable

The growing ranks of former cable executives re-entering the industry grew bigger last week, when Rapid Communications LLC president Tom Semptimphelter agreed to buy about 6,500 subscribers in Virginia from NTELOS Inc.

New York-based cable investment bank DH Capital LLC represented NTELOS in the deal.

Terms were not disclosed, but a source familiar with the matter pegged the sale price at $8 million to $9 million, or about 10 times annualized cash flow.

Rapid was a small player in the 1990s, amassing about 36,000 subscribers in seven states, including Missouri, Kentucky and Tennessee. Rapid sold those systems in 2000 and 2001 to Mediacom Communications Corp., Cox Communications Inc. and Comcast Corp. in a series of deals.

Semptimphelter, former vice president of corporate development at Tele-Communications Inc., kept one foot in the industry and has been involved in a few small cable construction firms since then.

In January, Rapid rejoined the cable-systems business, purchasing about 4,100 subscribers in Clinton, Ind.

"It seemed like there was an opportunity there," Semptimphelter said. "Not a lot of deals were getting done, and I thought if we could get some deals we'd make a pretty nice business."

Rapid plans to expand its cable footprint, but has no set goal as to how big it will ultimately get. Rapid will be opportunistic, Semptimphelter added, with no set focus on any particular geographic area.

"We'll go anywhere," Semptimphelter said.

Semptimphelter's management team features former colleagues at Rapid Communications, including chief technology officer Steve Rice and general manager and controller Belinda Murphy.

Semptimphelter said he is not discouraged by the other former cable executives who've returned the business, adding that there should be plenty of room for each company to grow. He added that he built Rapid's first iteration to 36,000 customers through about 14 separate acquisitions, and he isn't about to stop now.

"I'm an old acquisitions guy," Semptimphelter said.

Rapid already has three private-equity backers — Boston-based private equity firms Housatonic Partners and Alta Communications, and Virginia-based Columbia Capital.

"We're very excited to be back in business with Tom," said Housatonic principal Will Thorndike. "We had an excellent experience with him before."

Other former cable executives who've recently bought their way back into cable ownership included Jerry Kent, whose Cequel III has made a flurry of cable deals in recent months; Bresnan Communications Inc. president Bill Bresnan; Steve Simmons; Steve Weed and Dan Ryan.