| Virginia-based overbuilder RCN announced is thought to be exploring strategic alternatives, including a possible sell-out. RCN's low debt and position in key markets make it a likely acquisition target. In this report, we explore the company's financial status, and the benefits and challenges that a potential buyer would encounter. Six tables and charts are included.
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COMPANY BACKGROUND
RCN’S FINANCIAL POSITION
ACQUISITION PROSPECTS
Benefits of an RCN Acquisition:
Risks of an RCN Acquisition:
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RCN Cable could be takeover candidate, Pike & Fischer concludes in new report
Silver Spring, MD, October 20--RCN Cable, a regional provider of bundled cable services, may be a candidate for takeover and should fetch a substantial price, Pike & Fischer, a telecom consultant and publisher, concludes in a new profile of the company.
RCN, which is based in Herndon, VA, uses its own fiber optic network to provide television, telephone and broadband services to 418,000 customers in New York, Boston, Pennsylvania, Chicago, San Francisco, Los Angeles and Washington, D.C. Its revenue last year was $561 million.
Pike & Fischer cited recent rumors in the financial press that RCN has hired The Blackstone Group to help it explore strategic opportunities. It wrote:
“While neither RCN nor Blackstone has commented on their relationship or the possibility of a sell-out, Pike & Fischer believes that RCN’s low debt and its position within key metropolitan markets makes it a likely target for acquisition. Furthermore, RCN’s fiber optic network may present a value proposition to potential acquirers, as it may allow differentiation in a highly competitive market.”
Despite that potential sell-out, RCN is reportedly weighing the purchase of several small phone companies if a sale doesn’t materialize, Pike & Fischer wrote.
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Tim Deal
Tim Deal serves as our Senior Analyst, with a special focus on broadband-enabled consumer electronics devices and on emerging mass market applications such as online video sharing and VoIP-optimized e-commerce. Tim has developed SWOT analyses on such products as the iPhone, the Apple TV service, and rich-media applications on such social networking sites as MySpace. Tim has been providing detailed and actionable competitive intelligence analysis to leading technology firms for more than seven years. In that time he has authored more than one hundred comprehensive syndicated reports and an equal number of custom financial models covering the computing, consumer electronics, digital media, and storage industries. Prior to his career in competitive intelligence, Tim served as a counterintelligence/human intelligence and force protection analyst with the United States Army. Tim lives in the Seacoast area of New Hampshire. Contact Tim at tdeal@pf.com.
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