BendBroadband to be sold

Chicago company to purchase local cable, Internet provider

By Joseph Ditzler / The Bulletin / @josefditzler

Telephone and Data Systems Inc., a Chicago-based, Fortune 500 telecommunications company, has agreed to purchase BendBroadband, the locally grown cable and Internet provider, and its affiliates for $261 million, the companies announced Thursday.

The purchase is contingent upon regulatory approval but it’s expected to close by the third quarter.

All of BendBroadband’s approximately 280 employees will stay on after the sale, said company President and CEO Amy Tykeson. “Our jobs will stay in Central Oregon,” she said. “And TDS views our employees as great assets and one of the main reasons for the purchase.”

She said BendBroadband customers should expect no interruption in service.

The company will continue to operate as BendBroadband, with the familiar “local dog” logo, said President and CEO David Wittwer of TDS Telecom, a subsidiary of Telephone and Data Systems Inc.

“This is a great opportunity to leverage the talent BendBroadband has developed as TDS continues to grow,” he said Thursday.

Wittwer said BendBroadband consumers will benefit from high-quality support and expanded services and products. While some services may become available at a lower cost, BendBroadband subscribers should not expect overall lower rates as a result of the sale, he said.

Telephone and Data Systems, publicly traded, has 5.9 million customers nationwide. It provides telecommunications services to 4.8 million wireless customers and 1.1 million wireline and cable connections, according to its filings with the Securities and Exchange Commission.

In 2013, it earned $839 million before taxes on $4.5 billion in revenue, according to its fourth-quarter earnings report.

It provides wireless service through U.S. Cellular, of which Telephone and Data Systems owns 84 percent. Through TDS Telecom it provides cable, phone and Internet service to 1.1 million connections in more than 100 communities. Its purchase of BendBroadband is the company’s second foray into Oregon. It owns a small phone company in Condon, Wittwer said.

Tykeson said BendBroadband, acting in an atmosphere of industry consolidation, sought to sell itself to a compatible buyer. “For us to try and navigate to a larger-scale opportunity to continue to build on our success was very important,” she said.

Second, she said, BendBroadband sought to provide “an additional opportunity for our associates to continue to be part of a large enterprise that benefits our community and customers going forward.”

And finally, she said that her father, company Vice Chairman Don Tykeson had been in the cable business more than 50 years; she’s been in the business 34 years. “As a family member, I’ve made the decision that it’s time to make a change,” she said.

BendBroadband, family owned, generated $70 million in revenue in 2013, according to the sale announcement Thursday. The company, headquartered in Bend, provides Internet service, cable television, telephone and other services in Central Oregon. It operates a data center through its affiliate, BendBroadband Vault, and cable advertising and broadcast services through Zolo Media. Both are included in the sale.

The company by Dec. 31 had acquired approximately 79,000 home and business connections, with 36,000 video subscribers, 41,000 high-speed broadband subscribers and 22,000 digital voice subscribers, according to the company.

Tykeson said Telephone and Data Systems shares the same values as BendBroadband: a focus on its customers, teamwork, integrity and giving back to the community.

— Reporter: 541-617-7815, jditzler@bendbulletin.com