Rural consolidation continues, this time on the cable side. BCI Broadband, a company formed with the specific goal of acquiring rural cable operators, has signed an agreement to purchase Allegiance Communications, a cable company which itself was formed through the acquisition of existing cable networks in rural areas of Arkansas, Kansas, Texas and Oklahoma.
The BCI Broadband management team includes some of the same people who built up Bresnan Communications, a cable operator that also focused on rural areas and that was sold to Cablevision in 2010.
In a press release, BCI said the Allegiance acquisition was the “first transaction in an aggressive growth plan by the company.” That growth plan will be funded, at least in part, by the private equity fund BBH Capital Partners, which is sponsored by Brown Brothers Harriman & Co
The release also quoted BCI CEO Jeff DeMond who attributed the BCI team’s success at Bresnan to “a distinctive balance of aggressive, yet thoughtful capital investment and a single-minded focus on the customer experience.”
He added that “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.”
If this story line sounds familiar, perhaps it’s because another group of experienced cable industry executives announced late last year that they had formed a company called Broadband Networks specifically to acquire broadband provider Omnicity – although unlike BCI, Broadband Networks doesn’t appear to be particularly interested in additional acquisitions.
Some observers are predicting significant consolidation among all types of rural broadband providers driven by a desire to obtain economies of scale and better compete in today’s environment.
Just last week two Ohio telcos announced plans to merge and in November Blackfoot Communications purchased Cutthroat Communications, as well as Fairpoint’s Idaho business.
And in the rural broadband wireless market, KeyOn Communications has made a number of acquisitions.
Those are just a few of the companies that have been involved in rural broadband mergers and acquisitions over the last few years and undoubtedly there will be many more moving forward.