Telephone and Data Systems Agrees to Acquire BendBroadband
Supports Cable and Broadband Growth Strategy
Telephone and Data Systems, Inc. [NYSE: TDS], parent company to TDS Telecom, today announced an agreement to acquire substantially all of the assets of a group of companies operating as BendBroadband, headquartered in Bend, Oregon, for a purchase price of $261 million. BendBroadband generated annual revenues of $70 million in 2013 and has approximately 280 employees. The transaction is expected to close in the third quarter of 2014 pending regulatory approvals and other conditions.
BendBroadband is a full-service communications company, offering an extensive range of broadband, fiber connectivity, cable television, and telephone services for commercial and residential customers in Central Oregon. The agreement also includes two affiliated companies operated by BendBroadband: BendBroadband Vault, a Tier III data center providing colocation and managed services, and Zolo Media, a cable advertising and broadcast business.
As of Dec. 31, 2013, BendBroadband passed approximately 79,000 homes and businesses, with approximately 36,000 video subscribers, 41,000 high-speed broadband subscribers and 22,000 digital voice subscribers. BendBroadband’s entire network is equipped to deliver high-speed, high-capacity broadband and video services.
“BendBroadband’s strong market position and technology leadership will help us achieve significant forward momentum in our cable strategy,” said David A. Wittwer, president and CEO, TDS Telecom. “We will leverage BendBroadband’s considerable expertise across our growing cable business, driving residential and commercial growth by delivering competitive broadband, video and managed services over the high-capacity network. We share BendBroadband’s vision of being a trusted partner to our customers and communities, and growing profitably through quality, service and innovation.”
“TDS is a longstanding, family-controlled company that shares our commitment to our customers, our employees and our communities. With TDS, we will keep hundreds of good jobs in Central Oregon,” said Amy Tykeson, president and CEO, BendBroadband. “I am proud of the customer-centered company we have built over 30 years, and I believe TDS is the right fit for our culture and values, and for our future. I want to reassure our customers that there will be no interruption in service, and BendBroadband will remain a strong partner to our Central Oregon communities.”
“We are building a high-quality cable business that will deliver value over the long term. BendBroadband’s culture of innovation and its attractive market demographics make it a strategic addition to our cable, broadband and data center portfolio,” said LeRoy T. Carlson, Jr., president and CEO, Telephone and Data Systems. “We are committed to investing resources in adjacent businesses like cable, where we can leverage our expertise and competencies to support profitable growth.”
RBC Capital Markets served as the exclusive M&A advisor to BendBroadband in connection with this transaction. Stoel Rives LLP, Davis Wright Tremaine LLP and Cinnamon Mueller LLC served as legal counsel to BendBroadband. Sidley Austin LLP served as legal counsel to TDS.