RCN Corp. said it has reached an agreement to sell its cable system in
Carmel, N.Y., with about 29,800 subscribers, to Susquehanna Communications Inc.
for $120 million in cash.
The deal values the properties at about $4,027 per subscriber, one of the
highest valuations in recent memory.
In February, RCN sold its Princeton, N.J., cable systems with 80,000
customers to Patriot Media & Communications for about $3,600 per
subscriber.
"The sale of the Carmel system allows us to further reduce our debt and
invest in our core business in major metropolitan markets, including completion
of the Manhattan upgrade," RCN chairman David McCourt said in a prepared
statement.
RCN said it would use about $66 million of the proceeds of the sale to reduce
bank debt.
The deal is expected to close in the first quarter of 2004.
"Carmel presented a unique opportunity to acquire a system with great video,
high-speed data and growing voice penetration," Susquehanna CEO Peter Brubaker
said in a prepared statement.
"The system has excellent demographics, and its customers have embraced
bundled services," Brubaker added. "We are very excited about the opportunity to
enter the residential voice business."
Separately, RCN said it will initiate a tender offer to buy back about $290
million in senior debt for no more than $92.5 million in cash.
