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For Immediate Release
SUREWEST COMMUNICATIONS REACHES DEFINITIVE AGREEMENT TO ACQUIRE
EVEREST BROADBAND
Transaction Will More Than Double SureWest’s Triple-Play
Customer Base
Accelerates SureWest’s Growth Strategy and Builds on its
Position as a
Leading-Edge Provider of Network Services
ROSEVILLE,
CA - December 6, 2007 - Leading independent communications
holding company SureWest Communications (Nasdaq: SURW)
announced today that it has signed a definitive agreement to
acquire Everest Broadband, Inc. (“Everest”), a
portfolio company of Seaport Capital, for $173 million in
cash. Everest is a privately held competitive provider of
high-speed data, video and voice services in the greater
Kansas City area. The transaction, which is expected to close
by the end of the first quarter 2008, will more than double
SureWest’s triple-play residential subscriber base and
facilitate the rapid expansion of its business
services.
SureWest
has been successfully transforming itself from a traditional
provider of voice products to a full-service integrated
communications company. This transaction significantly
advances SureWest’s strategic transformation by bringing
together two companies focused on delivering advanced services
to a knowledgeable customer demographic that has historically
demanded superior triple-play products.
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, California,
and Johnson County, Kansas and Kansas City, Missouri areas.
This includes approximately 95,000 data, 54,000 video and
53,000 voice RGUs in addition to roughly 117,000 voice access
lines. As a customer service and bandwidth leader reporting
2.7 RGUs per residential customer and an acceptance rate of
more than 75 percent on triple-play services, Everest provides
the opportunity to greatly increase SureWest’s average
revenue per user (ARPU) and its sale of multiple services to
an expanded and more diversified customer base. SureWest
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.
For
the third quarter ended September 30, 2007, the combined
company generated $66.5 million in unadjusted revenue and
approximately $21 million of unadjusted EBITDA. The combined
results exclude any pro forma adjustments necessary to reflect
the purchase transaction (EBITDA is defined as combined
operating earnings before interest, taxes, depreciation and
amortization, and is reconciled to GAAP results in the
accompanying table).
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“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 chief executive officer of SureWest. “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.
Everest’s advanced infrastructure has made it a
leading-edge communications provider boasting superior network
bandwidth capabilities in the area it serves. We believe we
can successfully leverage our industry-leading experience in
building and operating networks to provide superior service to
new and existing business and residential customers, which in
turn will improve long-term shareholder
return.”
Phil
Spencer, president and chief executive officer of Everest,
said, “SureWest and Everest share very similar customer
demographics and we look forward to continuing to bring
best-in-class products and reliability to our service area and
beyond. Our residential and business customers will continue
to be well-served with 5-star service by the combined
company.”
Today,
SureWest has one of the most advanced and reliable networks in
the nation, delivering an impressive 100 megabits per second
(Mbps) to each of its fiber customers and offering the fastest
symmetrical Internet speed in the country at up to 50 Mbps. It
continues to upgrade and expand its IP-based fiber-to-the-home
network to offer a truly superior customer experience. The
Company has also effectively leveraged its extensive network
bandwidth to become the first provider of HD IPTV in the
country and
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