Telephone and Data Systems, parent company to TDS Telecom and U.S. Cellular, plans to acquire New Mexico cable company Baja Broadband for $267.5 million.
Baja, which is headquartered in Alamogordo, N.M., generated annual revenue of $82.4 million in 2012, and has approximately 285 employees. The transaction is expected to close in the third quarter of 2013, pending regulatory approvals. The company provides video, high-speed broadband and voice services to residential and commercial customers in Colorado, New Mexico, Texas and Utah.
“Baja Broadband is a natural extension of TDS’ existing business, with significant potential to deliver increased returns over time,” said David Wittwer, president and CEO at TDS Telecom, which maintains a strong channel strategy. “Our strategy is to leverage our expertise and existing platform and technologies to accelerate growth in underserved, high-potential markets. We plan to build on Baja’s solid customer base and upgraded network to increase penetration and revenues with new services and products and outstanding customer experiences. And our experience with commercial customers will enable us to target new services and products to this fast-growing sector in Baja’s service areas.”
At the end of 2012, Baja passed approximately 212,000 homes, with about 74,000 video subscribers, 56,000 high-speed broadband subscribers and 15,000 digital voice subscribers. Approximately 96 percent of Baja’s network is equipped to deliver high-speed, high-capacity broadband and video services.
“Baja’s strong network capabilities will enable us to deliver highly competitive data services, while reducing the need for future capital investment,” added Wittwer.
“This acquisition is an important step in our ongoing efforts to build value over the long term,” said LeRoy Carlson, president and CEO at TDS. “We continue to seek opportunities to invest our resources where we believe they can deliver strong returns over time, and expand into adjacent businesses like cable and hosted and managed services that enable us to leverage our core competencies to support our strategy to grow profitably.”
