West Point, Ga. --Start-up MSOs Knology Holdings
Inc. and Millennium Digital Media Holdings have swung system deals to add to their growing
bases.
Knology, a cable overbuilder acquiring systems and
competitive franchises in the Southeast, has signed a letter of intent to buy Cable
Alabama Corp.'s Huntsville, Ala., system, with 35,000 subscribers.
And Millennium -- the first deal of which was to buy a
54,000-subscriber, mostly overbuilt system in Anne Arundel County, Md. -- has agreed to
buy Summit Communications Inc., which has about 42,000 subscribers in three Northwestern
states.
Waller Capital Corp. partner Joseph Duggan represented both
sellers. Terms weren't disclosed. Both deals are expected to close before the end of
the year.
Knology said it plans to spend $20 million on upgrading the
Huntsville system to accommodate digital-television, high-speed-data and local and
long-distance telephone services.
Knology already operates cable systems that it bought in
Montgomery, Ala.; Columbus, Ga.; and Panama City Beach, Fla., and it has won franchises to
overbuild systems in Charleston, S.C.; and Augusta, Ga.
According to securities filings, Knology had about 42,000
basic subscribers as of March 31.
Knology's original backer, ITC Holding Co. Inc., owns
stakes in several companies that are affiliated with Knology, including Internet-service
provider MindSpring Enterprises Inc., local and long-distance phone operator ITC^Deltacom
Inc. and wireless-phone carrier Powertel Inc.
Millennium, which is backed and controlled by
private-equity firm TSG Capital Corp., showed that it was willing to buy into a
competitive situation with its purchase of the Anne Arundel system from InterMedia
Partners. Summit also has competitive franchises -- Bellevue and downtown Seattle, which
are served by Tele-Communications Inc.
Summit founder James Hirshfield put the company on the
block in March, citing the high capital costs that it faced. It also has systems in Idaho
and Oregon. Millennium has said that it plans to aggressively introduce digital-video and
data services in its systems.
