Bill Gates' MSFT co-founder buying cable company:
Paul G. Allen Acquires All Limited Partnership Interests in Marcus Cable In Multibillion Dollar Transaction
Nation's Tenth-Largest Cable Operator Joins Allen's "Wired World"
DALLAS--(BUSINESS WIRE)--April 6, 1998-- Investor Paul G. Allen today announced he has entered into an agreement to acquire all of the limited partnership interests in the nation's tenth-largest cable operator, Marcus Cable in a $2.775 billion transaction.
The company joins Allen's ''Wired World'' portfolio of investments in new media, entertainment and technology companies. Through the purchase of the company's limited partnership interests, Allen becomes a full partner in Marcus Cable and will take an active role in the strategic direction of the company. Company founder Jeffrey Marcus remains the general partner and chairman. This transaction represents Allen's largest personal investment to date. The price represents approximately 11 times the company's annualized cash flow at closing.
''For over 20 years I have been talking about and investing in the 'wired world,' a connected future marked by the merger of high-bandwidth data channels, the power of the personal computer and the availability of compelling content,'' Allen said. ''Cable companies are uniquely positioned to deliver the next generation of advanced data services, and are therefore a perfect fit for this investment strategy. This, combined with the company's strong management team, made Marcus Cable a compelling investment. I look forward to working with them on delivering the next generation of digital products and services to our customers, and I look forward to continuing to invest in the cable industry.''
''We are thrilled with the prospect of working with Paul to help bring to fruition his vision of the future of cable television,'' said Jeffrey Marcus, chairman, CEO and president of Marcus Cable. ''With his investment in our company and in our industry, he brings a unique perspective; simply put, he envisions the future in a way most of us are incapable of doing. Earlier this year when we engaged Goldman, Sachs & Co. to evaluate alternatives for us, one of our options was to find a strategic partner who would want to build upon the base that we have created. In Paul Allen, we have an individual who not only believes strongly in the future of the cable television business, but who would also like to see Marcus Cable continue to grow. Truly this is the ideal outcome, not only for us but for the cable television industry.''
The agreement was signed on April 3, 1998, and is effective immediately. The terms of the financing were not disclosed.
Allen and Marcus have announced that, to commemorate their new association, they will make a $2 million joint contribution to the National Cable Television Center and Museum to be located at the University of Denver.
About Marcus Cable
Marcus Cable is the nation's tenth-largest cable television company, serving over 1.2 million customers. Last fall, the company announced that it was seeking buyers for certain non-strategic systems serving 193,000 customers in eight states. To date, three separate transactions have been announced, encompassing 159,000 customers for a total of $345 million. Marcus Cable also announced on April 1, 1998, that it completed the purchase of a system in suburban Birmingham, Ala., serving 23,000 customers. Pro forma for all divestitures and the Alabama acquisition, Marcus Cable will serve approximately 1.1 million customers in six distinct clusters. These clusters are located in Wisconsin (approximately 400,000 customers), the Dallas/Fort Worth Metroplex (approximately 200,000 customers) Birmingham and environs (approximately 140,000 customers), the Los Angeles basin and north-central California (approximately 135,000 customers), Indiana (approximately 114,000 customers) and eastern Tennessee/western North Carolina (approximately 100,000 customers).
About Paul G. Allen
Paul G. Allen owns and invests in a suite of companies exploring the potential of multimedia digital communications. Allen's business strategy includes encouraging communications and synergy between his companies for mutual benefit. His primary companies include Asymetrix Corp., Vulcan Ventures Inc. and Vulcan Northwest Inc., all of Bellevue, Wash., and Interval Research Corp. of Palo Alto, Calif.
He is the founder and largest shareholder of Starwave Corp. of Bellevue. Allen is owner of the Portland Trail Blazers NBA team and the NFL's Seattle Seahawks franchise, is a partner in the entertainment studio DreamWorks SKG and holds investments in more than 35 new-media companies. Allen has been pioneering new trails in the microcomputer industry since he co-founded Microsoft Corp. with Bill Gates in 1975. He served as Microsoft's executive vice president of research and new product development, the company's senior technology post, until 1983. Allen gives back to the community through the six Allen Charitable Foundations, which support arts, medical, forest protection and other charitable needs in the Pacific Northwest, and is the founder of Experience Music Project in Seattle.
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