Plan to Continue Community Involvement
by PAMELA HULSE ANDREWS Cascade CBN Editor
Central Oregon has seen companies arrive…purchase other companies, promise job growth or sustainability, only to later take the companies and the jobs and move on. It’s unlikely that the recent purchase of BendBroadband by a Fortune 500 company, will see jobs go as cable and telephone services are a unique local service and the growth that continues to occur in Central Oregon assures us that this is a very viable market for a telecom company.
However, concerns could arise as to how the company plans to continue the stellar community involvement and philanthropy that Central Oregon has benefited from the Tykeson family who founded and owned BendBroadband. Interviews with the CEO of TDS gives some assurance that we’ll see good community involvement from the new owners. We hope that is the case. Below is a recent interview with company officials with some basic facts about the transaction that is expected to be approved by the Federal Communications Commission in the next 90 days.
CBN Staff Report
Telephone and Data Systems, Inc., a Fortune 500 company, parent company to TDS Telecom, has formed an agreement to acquire the assets of Bend-based BendBroadband including BendBroadband Vault and Zolo Media for a purchase price of $261 million. BendBroadband generated annual revenues of $70 million in 2013 and has approximately 280 employees. The transaction is expected to close in the third quarter of 2014 pending standard regulatory approvals and other conditions.
As of December 31, 2013, BendBroadband passed approximately 79,000 homes and businesses, with approximately 36,000 video subscribers, 41,000 high-speed broadband subscribers and 22,000 digital voice subscribers.
“TDS is a longstanding, family-controlled company that shares our commitment to our customers, our employees and our communities,” said Amy Tykeson, president and CEO, BendBroadband. “An important part of the process for me was to be sure that we found a company that would retain our jobs, have a cultural alignment and that our customers are taken care of. We found all those aspects in TDS including keeping the local dog brand and local employees. It is our understanding that our team would be part of their expansion plan into cable.
“I want to reassure our customers that there will be no interruption in service and BendBroadband will remain a strong partner to our Central Oregon communities.”
David A. Wittwer, president and CEO, TDS Telecom, added, “It’s very important to us to keep the talent that’s in place. It’s key to our future growth. BendBroadband’s strong market position and technology leadership will help us achieve significant forward momentum in our cable strategy. We will leverage BendBroadband’s considerable expertise across our growing cable business, driving residential and commercial growth by delivering competitive broadband, video and managed services over the high-capacity network.”
Last year TDS purchased its first cable company, Baja Broadband in St. George, Utah, which, according to Wittwer, is similar in size and the number of customers as BendBroadband.
“I think Bend has done a wonderful job with local dog, looking at our company we’re a cultural match, being involved in the community in very important to us.”
Included in the agreement is the BendBroadband Vault, a Tier III data center providing colocation and managed services. “The Vault is a unique facility on the west coast with Tier 3 certification and carbon neutral status,” explained Tykeson. “One of the beautiful things about the deal is that TDS has a data center business with one currently under construction in Denver. They offer clients other disaster recovery services and IT support that helps round out additional opportunities for our customers.”
“Amy is exactly right,” added Wittwer. “We’re looking to create a unique customer experience with varying levels of services. We have acquired five data centers and continue to expand and add others.”
“One of our goals was to find comprehensive solutions for our customers,” said Tykeson. “One of the things that is exciting is that our great support teams will be here, they live here and they know what’s happening. It was an objective of mine to be sure to be able to retain the jobs and benefits, that was reassuring. Dave and Mark (Mark Barber, vice president of Cable Operations for TDS Telecom) talked with our associates about TDS, a family business, Fortune 500 company, with integrity that focuses on customers and it really lined up with our company and the opportunities for expanding their cable division.”
“We are building a high-quality cable business that will deliver value over the long term. BendBroadband’s culture of innovation and its attractive market demographics make it a strategic addition to our cable, broadband and data center portfolio,” said LeRoy T. Carlson, Jr., president and CEO, Telephone and Data Systems. “We are committed to investing resources in adjacent businesses like cable, where we can leverage our expertise and competencies to support profitable growth.”
As for Tykeson’s transition from the company, “As with any transaction, my plan is to find something else to do, catch my breath, consider other opportunities,” she concluded. “I feel very confident about TDS.”
Founded in 1969 and headquartered in Chicago, TDS employed 10,500 people as of Dec. 31, 2013. Visit teldta.com for comprehensive financial information, including earnings releases, quarterly and annual filings, shareholder information and more.
TDS Telecom, the seventh largest local exchange telephone company in the U.S., is a wholly owned subsidiary of Telephone and Data Systems, Inc. TDS Telecom provides 1.1 million connections to high-speed internet, phone and TV entertainment services to customers in more than a hundred rural, suburban and metropolitan communities.