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WOW’s Parent Buys Sigecom Subscribers

Overbuilder Sigecom LLC is being sold to Avista Capital Partners, parent of cable-system overbuilder WideOpenWest, in a deal estimated to be worth about $115 million.

Sigecom is owned by Utilicom LLC, a partnership between Vectren Corp., an Indiana electric-and-gas utility, 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.

At $115 million, the price represents about 8.2 times Sigecom’s cash flow, or about $4,259 per subscriber.

New York cable investment banker Waller Capital Corp. initiated the transaction and advised Sigecom in the sale. Credit Suisse First Boston represented WOW.

Sigecom entered the Evansville market in 1998 and enjoyed quick success — incumbent cable operator Insight Communications Co. had yet to offer digital-cable and high-speed Internet service. But the company scaled back ambitious buildout plans in 2004.

Avista Capital recently purchased WideOpenWest for $800 million.

The Sigecom systems should fit nicely with WOW’s properties in Indiana. After the deal closes, likely in the fourth quarter, WOW will pass about 1.4 million homes in Illinois, Indiana, Michigan and Ohio. WOW has about 350,000 subscribers in those areas.