BCI Broadband, a new company formed by several former executives of Bresnan Communications, said it has purchased Allegiance Communications. No purchase price was provided.
BCI and its venture partner said they expect this will be the first move in what they termed “an aggressive growth plan.”
BCI is led by President and CEO Jeffrey DeMond and Andrew Kober, executive vice president and CFO, both formerly part of Bresnan’s management team. BCI worked with BBH Capital Partners (BBHCP), a private equity fund sponsored by Brown Brothers Harriman & Co., to buy Allegiance Communications.
Allegiance Communications operates a set of broadband systems outside of urban centers in parts of Kansas, Oklahoma, Missouri and Texas. The company nearly doubled in size in 2006 when it purchased some rural systems from Charter Communications. At the time, the company reported 70,000 video subscribers and 12,000 broadband subscribers.
Allegiance Communications was the recipient of a 2009 Broadband Stimulus award totaling about $28 million, which the company said it was going to use to upgrade its last-mile connections to fiber-to-the-home.
In several of the most recent sales of cable systems (including the sale of Bresnan to Cablevision), the purchase price range has worked out to be $3,000 to $4,000 per subscriber. By that rule of thumb, BCI’s acquisition of Allegiance might have been worth somewhere in the neighborhood of $250 million.
DeMond said: “The Bresnan management team remains largely intact within BCI, and that makes us extraordinarily well positioned to develop the Allegiance properties to their greatest potential. Our success across much of rural America, as well as markets in Chile and Poland, was built upon a distinctive balance of aggressive, yet thoughtful capital investment and a single-minded focus on the customer experience. Our team looks forward to once again creating value for our partners while providing immediate benefit to both existing and new subscribers in the former Allegiance communities."