Charter Communications, the nation's fourth-largest cable operator, has completed the sale of cable systems serving approximately 65,000 subscribers in seven states to CoBridge Communications.
The 36 headends acquired by CoBridge are located in Alabama, Arkansas, Georgia, Louisiana, Missouri, Ohio and Texas. As a result of this sale, Charter no longer operates in Arkansas and Ohio. Charter now serves 25 states. RBC Daniels acted as financial advisor to Charter in the transaction. Financial terms for the sale weren't available. CoBridge is owned by The Gores Group, which is a Los Angeles-based private equity firm.
"The sale of these systems furthers our continued strategy to strengthen our clusters and enhance operating efficiencies by divesting geographically non-strategic assets," said Charter President and CEO Mike Lovett. "Our primary focus is to provide value to our customers and enhance their experience with Charter, and more tightly clustered systems allow us to more effectively achieve this."
CoBridge's stated goal "is to purchase under-managed and under-marketed cable television communities that can be improved over time." With the 36 Charter systems, CoBridge CEO Scott Widham said CoBridge would upgrade the triple-play service offerings to customers, as well as add business-class VoIP and Ethernet-based services.
"We are thrilled about working with The Gores Group to bring these cable systems the latest technology and best possible service," Widham said. "Gores is known for investing in the businesses it acquires, and we look forward to putting their capital and our combined operations expertise to work as we endeavor to create a platform to acquire additional cable systems."
Widham recently said that his company would convert the remaining one-way systems to two-way systems and increase bandwidth through the use of digital terminal adapters for analog-to-digital conversions.
"Our strategy is to use existing housings for amplifiers and just do drop-in modules to increase bandwidth, or look at other strategies like MPEG-4 delivery codecs," Widham said. "We don't want to go in and completely rebuild systems unless they're absolutely at the end of their lives and that's the last resort."
Widham said that CoBridge might buy additional cable systems.
We are very excited about this transaction," said Steve Yager, senior managing director of The Gores Group. "We have been actively investing in the telecommunications and media space, and this transaction gives us another entry into this industry."