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Cable Operators

Hicks, Muse Closes P.R. Deal, Eyes Others

9/07/2004 5:20 AM Eastern

Fresh off a $155 million agreement to purchase Centennial Communications Corp.’s 73,000 cable subscribers in Puerto Rico, a partner in private-equity giant Hicks, Muse, Tate & Furst Inc. said the possibility of further deals remains on the horizon.

The all-cash deal is expected to close in early 2005. New York-based cable-investment banker Waller Capital Corp. advised Centennial in the transaction.

Centennial was the second-largest MSO in Puerto Rico behind Adelphia Communications Corp.’s 140,000 customers in the San Juan area. Liberty Media International -- which owns Liberty Cablevision of Puerto Rico, with about 120,000 subscribers -- is No. 3.

In an interview Tuesday, Hicks, Muse partner Peter Brodsky said more deals could come.

“We’re buying the company predicated on keeping it independent, adding value where we feel we can add and then, when our value-add is done, looking to exit,” Brodsky said.

“Obviously it’s very, very attractive to consolidate systems,” he added. “If you consolidate headends, there would be a tremendous amount of synergy either between two or among all three of those companies. We will remain opportunistic about that, either as a buyer or a seller. But our plan is to put our heads down, operate the company, provide the best service we can to our customers and try and create value that way. If some other opportunities come across our desks, we will definitely explore those.”

For now, Brodsky said, the plan is to beef up marketing and grow the systems’ high-speed-Internet subscriber base. Centennial launched high-speed service recently, and it has about 5,000 customers for that service.

“We believe the demographics in our area of Puerto Rico will be very interested in having the high-speed-data product, based on our experience in other economies,” Brodsky said.

Hicks, Muse has investments in other cable systems in Latin America, including in Argentina, Venezuela and Brazil.

September