SureWest Grows Triple-Play Biz with Everest Purchase

IPTV Pioneer SureWest Communications Inc. today signed a deal to acquire competitive provider Everest Broadband Inc. for $173 million in cash, a development that would enable SureWest to more than double its triple-play customer base.

The deal comes as little surprise as SureWest recently said publicly that it was in the market for acquisitions that would extend its network and customer base, as well as fuel the expansion of its business services.

The deal, which is expected to close by the end of the first quarter 2008, brings together a fast-transforming service provider in SureWest with an operator from the Seaport Capital portfolio that has largely complementary assets.

The combined company will serve a broader customer base across two comparable areas and together possess over 200,000 revenue-generating units (RGUs) in the greater Sacramento, Calif.; Johnson County, Kan.; and Kansas City, Mo. areas, according to SureWest.

This includes approximately 95,000 data, 54,000 video and 53,000 voice RGUs in addition to roughly 117,000 voice access lines. Everest claims 2.7 RGUs per residential customer and an acceptance rate of more than 75 percent on triple-play services.

SureWest says it intends to grow the number of total marketable homes and increase penetration on the Everest network while leveraging Everest’s fiber ring to provide services to a greater number of business customers in the area.

“Over the past two years, we have made great strides in transforming SureWest into a premier triple-play provider that delivers a superior customer experience,” said Steve Oldham, president and CEO of SureWest, in prepared comments. “The Everest transaction significantly accelerates our growth and geographic diversification strategy by adding Everest’s rapidly expanding customer base in the greater Kansas City area to our northern California service territory.”

Today, SureWest delivers 100mbps to each of its fiber customers and offers symmetrical Internet speed at up to 50mbps. It continues to upgrade and expand its IP-based FTTH network to offer a truly superior customer experience. The video visionary also has effectively leveraged its network bandwidth to deliver 50 HDTV channels before the end of 2007.

Everest Broadband Inc. www.everestkc.com
Seaport Capital LLC www.seaportcapital.com
SureWest Communications Inc. www.surewest.com

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