News Feed Item

WOW! Announces Definitive Agreement to Divest Its South Dakota Systems for Approximately $262 Million to Clarity Telecom

WOW! Internet, Cable & Phone (“WOW!”) and Clarity Telecom (“Clarity”) today announced that it has entered into a definitive agreement under which Clarity will acquire WOW!’s Rapid City and Sioux Falls, South Dakota systems for gross proceeds of approximately $262 million in cash, subject to certain adjustments set forth in the agreement.

The South Dakota systems had total customers and RGUs of approximately 52,700 and 110,600, respectively, as of March 31, 2014 and generated annual revenues of approximately $81.1 million during the year-ended December 31, 2013. The $262 million purchase price represents a purchase multiple of approximately 8.2x on the year-ended December 31, 2013 Adjusted EBITDA associated with the South Dakota systems.

“The sale of the South Dakota systems enhances our operating efficiencies and enables us to continue focusing more aggressively on our long-term strategic initiatives,” said Steven Cochran, CEO of WOW!. “I’m especially pleased that the agreement with Clarity enables our employees and customers to connect with a company that will focus on growing these systems aggressively. Jim Gleason and his team are some of the most respected and knowledgeable cable operators in the industry and our South Dakota employees are a skilled team, dedicated to serving their customers.”

“We’re delighted to acquire the South Dakota networks from WOW! and are equally excited to start a new platform in the broadband communications industry,” said Jim Gleason, CEO of Clarity Telecom. “The South Dakota markets offer tremendous opportunity and we look forward to working with the WOW! employees located in the region. The communities served in South Dakota, southwest Minnesota and northwest Iowa will be the focus of the company and will be the platform to build upon for future acquisitions and growth.”

The sale is expected to close in the late third or early fourth quarter of 2014, following the satisfaction of regulatory requirements and other customary closing conditions.

RBC Capital Markets acted as financial advisor to WOW! on the transaction.

Use of Non-GAAP Financial Measures and Operating Metrics

We refer in this press release to certain non-GAAP financial measures including Adjusted EBITDA. We believe that this non-GAAP measure enhances an investor’s understanding of our financial performance. We believe that this non-GAAP measure is a useful financial metric to assess our operating performance from period to period by excluding certain items that we believe are not representative of our core business. We believe that this non-GAAP measure provides investors with useful information for assessing the comparability between periods of our ability to generate cash from operations sufficient to pay taxes, to service debt and to undertake capital expenditures. We use this non-GAAP measure for business planning purposes and in measuring our performance relative to that of our competitors. We believe this non-GAAP measure is commonly used by investors to evaluate our performance and that of our competitors.

Adjusted EBITDA is defined by WOW! as net income (loss) before net interest expense, income taxes, depreciation and amortization (including impairments), gains (losses) realized and unrealized on derivative instruments, management fees to related party, the write-up or write-off of any asset, debt modification expenses, loss on extinguishment of debt, integration and restructuring expenses and all non-cash charges and expenses (including equity based compensation expense) and certain other income and expenses, as further defined in our credit facilities. Adjusted EBITDA is not a presentation made in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and our use of the term Adjusted EBITDA varies from others in our industry. Adjusted EBITDA should not be considered as an alternative to net income (loss), operating income or any other performance measures derived in accordance with GAAP as measures of operating performance or operating cash flows or as measures of liquidity.

Adjusted EBITDA has important limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. For example, Adjusted EBITDA:

  • excludes certain tax payments that may represent a reduction in cash available to us;
  • does not reflect any cash capital expenditure requirements for the assets being depreciated and amortized that may have to be replaced in the future;
  • does not reflect changes in, or cash requirements for, our working capital needs; and
  • does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debt.

See “Unaudited Reconciliations of Non-GAAP Measures to GAAP Measures” in our Earnings Release for the first quarter ended March 31, 2014 as filed with the U. S. Securities and Exchange Commission (“SEC”) on May 9, 2014 for reconciliations of Adjusted EBITDA to our net income (loss), which is the most directly comparable GAAP financial measure. Our estimate of Adjusted EBITDA associated with the South Dakota systems presented herein is intended solely for purposes of calculating the multiple discussed above and is not intended as a report on the operating results of the South Dakota systems. The operating results of the South Dakota systems are not separately reported in our periodic reports, and therefore we cannot reconcile the Adjusted EBITDA of the South Dakota systems to the most directly comparable GAAP financial measure.

In addition, we use the operating metrics customers and RGUs in this release. Because we deliver multiple services to our customers, we report the total number of customers as those who receive at least one of our video (“Video”), high-speed data (“HSD”) or telephony (“Telephony”) services, without regard to which or how many of those services they subscribe. We report Video subscribers as the number of basic cable subscribers and do not include customers who only subscribe to HSD or Telephony services in this total. The combined total of Video, HSD and Telephony subscribers is referred to as Revenue Generating Units (“RGUs”).

Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements reflect management’s current views with respect to future events and financial performance. The forward-looking statements included in this release are made as of the date hereof. Except as required by law, we assume no obligation to update these forward-looking statements, even if new information becomes available in the future. Actual results may differ materially from those expected because of various risks and uncertainties. You should review our filings with the SEC, including the section titled “Risk Factors” contained in our Form 10-K Annual Report filed with the SEC on March 17, 2014.

About WOW!

WOW! has been one of the nation’s leading providers of high-speed Internet, cable TV, and phone serving communities in Illinois, Michigan, Indiana and Ohio since 2001. In July 2012, WOW! acquired Knology, Inc. and began serving communities in the Southeast and Midwest. WOW!’s operating philosophy is to deliver an employee and customer experience that lives up to its name. WOW! is privately owned and controlled by Avista Capital Partners. For more information, please visit www.wowway.com.

About Clarity Telecom

Clarity Telecom is a new platform company in the broadband communications industry focusing on Internet, Cable Television and Telephone and is founded by Jim Gleason, Keith Davidson and Larry Eby as well as private equity firm Pamlico Capital of Charlotte, North Carolina. The Clarity management team and Pamlico are the former owners of NewWave Communications which was divested in 2013. The management team has operated cable and telecommunications businesses for more than 20 years and is headquartered in Sikeston, Missouri.

About Pamlico Capital

Pamlico Capital is a private equity firm founded in 1988 which primarily invests in lower middle market companies in the U.S. Pamlico Capital seeks control-oriented growth equity investments of up to $100 million alongside proven management teams in its target industries; business & technology services, communications, and healthcare. Since inception, the firm, based in Charlotte, NC, has invested over $3 billion. For additional information, please visit www.pamlicocapital.com.

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
You have great SaaS business app ideas. You want to turn your idea quickly into a functional and engaging proof of concept. You need to be able to modify it to meet customers' needs, and you need to deliver a complete and secure SaaS application. How could you achieve all the above and yet avoid unforeseen IT requirements that add unnecessary cost and complexity? You also want your app to be responsive in any device at any time. In his session at 19th Cloud Expo, Mark Allen, General Manager of...
SYS-CON Events announced today that Streamlyzer will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Streamlyzer is a powerful analytics for video streaming service that enables video streaming providers to monitor and analyze QoE (Quality-of-Experience) from end-user devices in real time.
Without lifecycle traceability and visibility across the tool chain, stakeholders from Planning-to-Ops have limited insight and answers to who, what, when, why and how across the DevOps lifecycle. This impacts the ability to deliver high quality software at the needed velocity to drive positive business outcomes. In his general session at @DevOpsSummit at 19th Cloud Expo, Eric Robertson, General Manager at CollabNet, will discuss how customers are able to achieve a level of transparency that e...
SYS-CON Events announced today that Pulzze Systems will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Pulzze Systems, Inc. provides infrastructure products for the Internet of Things to enable any connected device and system to carry out matched operations without programming. For more information, visit http://www.pulzzesystems.com.
Today every business relies on software to drive the innovation necessary for a competitive edge in the Application Economy. This is why collaboration between development and operations, or DevOps, has become IT’s number one priority. Whether you are in Dev or Ops, understanding how to implement a DevOps strategy can deliver faster development cycles, improved software quality, reduced deployment times and overall better experiences for your customers.
One of biggest questions about Big Data is “How do we harness all that information for business use quickly and effectively?” Geographic Information Systems (GIS) or spatial technology is about more than making maps, but adding critical context and meaning to data of all types, coming from all different channels – even sensors. In his session at @ThingsExpo, William (Bill) Meehan, director of utility solutions for Esri, will take a closer look at the current state of spatial technology and ar...
Cloud based infrastructure deployment is becoming more and more appealing to customers, from Fortune 500 companies to SMEs due to its pay-as-you-go model. Enterprise storage vendors are able to reach out to these customers by integrating in cloud based deployments; this needs adaptability and interoperability of the products confirming to cloud standards such as OpenStack, CloudStack, or Azure. As compared to off the shelf commodity storage, enterprise storages by its reliability, high-availabil...
The IoT industry is now at a crossroads, between the fast-paced innovation of technologies and the pending mass adoption by global enterprises. The complexity of combining rapidly evolving technologies and the need to establish practices for market acceleration pose a strong challenge to global enterprises as well as IoT vendors. In his session at @ThingsExpo, Clark Smith, senior product manager for Numerex, will discuss how Numerex, as an experienced, established IoT provider, has embraced a ...
In past @ThingsExpo presentations, Joseph di Paolantonio has explored how various Internet of Things (IoT) and data management and analytics (DMA) solution spaces will come together as sensor analytics ecosystems. This year, in his session at @ThingsExpo, Joseph di Paolantonio from DataArchon, will be adding the numerous Transportation areas, from autonomous vehicles to “Uber for containers.” While IoT data in any one area of Transportation will have a huge impact in that area, combining sensor...
Without lifecycle traceability and visibility across the tool chain, stakeholders from Planning-to-Ops have limited insight and answers to who, what, when, why and how across the DevOps lifecycle. This impacts the ability to deliver high quality software at the needed velocity to drive positive business outcomes. In his session at @DevOpsSummit 19th Cloud Expo, Eric Robertson, General Manager at CollabNet, will show how customers are able to achieve a level of transparency that enables everyon...
“Media Sponsor” of SYS-CON's 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. CloudBerry Backup is a leading cross-platform cloud backup and disaster recovery solution integrated with major public cloud services, such as Amazon Web Services, Microsoft Azure and Google Cloud Platform.
In the next forty months – just over three years – businesses will undergo extraordinary changes. The exponential growth of digitization and machine learning will see a step function change in how businesses create value, satisfy customers, and outperform their competition. In the next forty months companies will take the actions that will see them get to the next level of the game called Capitalism. Or they won’t – game over. The winners of today and tomorrow think differently, follow different...
@DevOpsSummit has been named the ‘Top DevOps Influencer' by iTrend. iTrend processes millions of conversations, tweets, interactions, news articles, press releases, blog posts - and extract meaning form them and analyzes mobile and desktop software platforms used to communicate, various metadata (such as geo location), and automation tools. In overall placement, @DevOpsSummit ranked as the number one ‘DevOps Influencer' followed by @CloudExpo at third, and @MicroservicesE at 24th.
The Internet of Things (IoT), in all its myriad manifestations, has great potential. Much of that potential comes from the evolving data management and analytic (DMA) technologies and processes that allow us to gain insight from all of the IoT data that can be generated and gathered. This potential may never be met as those data sets are tied to specific industry verticals and single markets, with no clear way to use IoT data and sensor analytics to fulfill the hype being given the IoT today.
Ask someone to architect an Internet of Things (IoT) solution and you are guaranteed to see a reference to the cloud. This would lead you to believe that IoT requires the cloud to exist. However, there are many IoT use cases where the cloud is not feasible or desirable. In his session at @ThingsExpo, Dave McCarthy, Director of Products at Bsquare Corporation, will discuss the strategies that exist to extend intelligence directly to IoT devices and sensors, freeing them from the constraints of ...