Business

TDS plans to buy Continuum for $80 million

 

Aug. 14. By Dave Vieser. TDS Broadband Services, one of the nation’s largest telephone, broadband and television services, has a tentative agreement to purchase Continuum for $80 million.

Mooresville-based Continuum is the municipally owned cable system that serves customers in Davidson, Mooresville and Cornelius. The deal, which must be approved by voters in Davidson and Mooresville, was unanimously approved by the Davidson and Mooresville Town Boards.

The proposed sale would raise $80 million for Davidson and Mooresville, about what the two towns paid to take over the old, scandal-plagued Adelphia system back in 2007 and subsequently renamed it MI-Connection. Two years ago the company rebranded from MI-Connection to Continuum.

While it may have seemed like a good idea at the time, operating a cable system eventually proved costly for the towns. The system had its challenges as many households dropped phone land lines in favor of cell phones, and cable TV in favor of streaming.

TDS, based in Madison, Wis., delivers a mix of Voice over internet protocol (VoIP), high-speed Internet and hosted-managed services to nearly 1 million customers.

Telephone and Data Systems is a Fortune 1000 company that includes U.S. Cellular, TDS Telecom, BendBroadband and OneNeck IT Solutions. Founded in 1969 and headquartered in Chicago, TDS employs more than 9,400 people.

Total operating revenues reached $1.26 billion for the second quarter of 2019. It provides on the order of 6 million connections around the country, compared to 17,000 for Continuum/MI-Connection.

In Davidson alone, the town had to cover $10 million in losses over the course of a dozen years—with taxpayers footing the bill. Mooresville has paid even more—$28.3 million in debt service—over the same time.

The Cornelius Town Board chose not to participate in the purchase.

Operating-wise, the late Continuum CEO, David Auger improved services over the eight years he was there but it was the debt service that made the cable company a losing proposition for the Davidson and Mooresville.

The towns put the system up for sale earlier in the year, and after a series of offers from six different firms, TDS was selected as the highest and most responsive offer received by the deadline. The Towns entered into an exclusivity agreement, dated July 3, as part of the contractual sales process.

Mooresville’s Interim Town Manager Ryan Rase said, “While many would have just focused on the dollars, we took a holistic approach and looked critically at finances, as well as industry reputation and strong community commitment.”

“After a very intensive sales process, we are pleased to welcome TDS to our communities,” said Davidson Town Manager Jamie Justice. “We look forward to them joining us in providing services to our residents and job opportunities for this area.”

Per NC State Statute, a referendum will be on the November 5 ballot asking eligible Mooresville and Davidson voters to approve the sale of Continuum. Pending voter approval in November, transfer of ownership is expected to occur by the end of 2019.

Continuum employees will be offered positions within TDS to support local and national operations. TDS employs nearly 2,700 people in 30 states.

Discussion

One Response to “TDS plans to buy Continuum for $80 million”

  1. While it may have seemed like a good idea at the time, operating a cable system eventually proved costly for the towns,
    INCORRECT
    A good idea for a few, the majority had no say.

    Posted by Richard Matthews | August 15, 2019, 5:50 am

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