Overbuilder SIGECOM is being sold to Avista Capital Partners, parent of overbuilder WideOpenWest, in a deal estimated to be worth about $115 million.
SIGECOM is owned by Utilicom, a partnership between Indiana electric and gas utility Vectren and private-equity group Blackstone Capital Partners.
The systems being sold represent about 27,000 subscribers in Evansville and Newburgh Ind., according to executives in the financial community familiar with the deal. At $115 million, the price represents about 8.2 times SIGECOM’s cash flow, or about $4,259 per subscriber.
SIGECOM entered the Evansville market in 1998 and enjoyed quick success -- incumbent cable operator Insight Communications had yet to offer digital-cable and high-speed-data service. But the company scaled back its ambitious buildout plans in 2004. SIGECOM had planned to expand its reach by building a 3,500-mile fiber-optic network in Indianapolis (passing 330,000 homes) and a 1,000-mile network in Dayton, Ohio (passing 108,000 homes), but it ran into trouble finding debt financing for the project.
According to Vectren’s 10-Q quarterly report, filed Aug. 4, the utility company said it stopped making investments in SIGECOM in 2004 and recorded a $6 million charge that year to write down its Utilicom investments to fair value. The company said in the filing that as of June 30, Vectren had invested about $45.6 million in Utilicom.
The deal comes about 100 days after Avista purchased WOW for an estimated $800 million. The SIGECOM systems also are expected to fit nicely with WOW’s properties in Indiana. After the deal is closed -- expected in the fourth quarter -- WOW will have about 1.4 million homes passed in Illinois, Indiana, Michigan and Ohio.
“The WOW team is extremely excited with this growth opportunity,” WOW CEO Colleen Abdoulah said in a prepared statement. “SIGECOM’s focus on delivering exceptional bundled value and the highest-quality customer service is a strong strategic fit with WOW’s operating philosophy. We are committed to continuing to serve customers in southern Indiana with an array of services that meet their needs, at a great value, backed by award-winning customer service.”
New York cable investment banker Waller Capital initiated the transaction and served as financial advisor to SIGECOM in the sale. Credit Suisse First Boston represented WOW.
Weekly digest of streaming and OTT industry news
Thank you for signing up to Multichannel News. You will receive a verification email shortly.
There was a problem. Please refresh the page and try again.