Science & Technology
Science and Technology
Science and Technology
Tue, July 14, 2009
Mon, July 13, 2009 MDU Communications International, Inc.: MDU Communications Acquires Subscribers and Related Assets From Rocket Broadband Networ
TOTOWA, NEW JERSEY--(Marketwire - July 13, 2009) - MDU Communications International, Inc. (OTCBB:MDTV), a leading end-to-end provider of digital satellite television programming, high-speed Internet and other premium communication and information services to the residential multi-family market, has executed an agreement to acquire 3,938 subscribers and related assets from Rocket Broadband Networks, Inc. These subscribers are located in 31 multi-family properties, which represent over 9,100 total units passed by wire. Concurrent with the signing of the agreement, the Company closed on the initial purchase of 2,512 subscribers located in 18 properties. The Company expects to close on the balance of 1,426 subscribers in 13 properties within thirty to sixty days upon obtaining certain consents.
The assets being acquired are located in New York, part of the Company's well-established Northeast region, and include 589 direct-to-home, 2,772 private cable, 555 Internet and 22 VoIP subscribers located in high-penetration properties. A vast majority of the properties are under either a bulk or exclusive agreement. Additionally, the Company acquired a Right of Entry Agreement to provide services to 20 additional properties encompassing 2,108 residences. The purchase price of the asset acquisition on a per subscriber basis was slightly below the price paid by the Company for previous acquisitions. The Company financed the acquisition through its $30 million credit facility.
This asset acquisition is immediately accretive to the Company, and as such, will result in an increase in revenue and a positive contribution toward the Company's EBITDA results. Additionally, the Company sees the acquisition as an opportunity of growth, both in the 2,108 new units covered by the acquired Right of Entry Agreement and in the potential increase to higher margin direct-to-home penetration rates within the acquired properties.
"The end of our third fiscal quarter '09 has been a milestone date on our horizon for over eighteen months as we worked through upgrading over 360 of our properties and 70,600 units to the new high definition platform so that our subscribers could enjoy state-of-the-art digital satellite television offerings," commented Sheldon Nelson, President and Chief Executive Officer of MDU Communications. "With that undertaking substantially behind us, our subscriber growth efforts, through acquisition and organic means, can again become our priority. The acquisition of the Rocket Broadband Network assets is not only a good jump start on growth, but is hopefully one of several strategic growth acquisitions the Company has planned across all of its core markets in the coming year."
About MDU: MDU Communications International, Inc. (OTCBB:MDTV) is a leading provider of premium communication/information services, including digital satellite television and high-speed (broadband) Internet services, exclusively to the United States multi-dwelling unit (MDU) marketplace - estimated to include 26 million residences. Through its wholly owned subsidiary, MDU Communications (USA) Inc., MDU Communications delivers DIRECTV® digital satellite television services and high-speed (broadband) Internet systems and is committed to delivering the next generation of interactive communication services to MDU residents. For additional information, please see [ www.mduc.com ] or contact Investor Relations.
"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: This release contains forward-looking statements relating to subscriber growth of the Company. Such statements involve risks and uncertainties which may cause results to differ materially from those set forth in these statements, including, but not limited to, efforts on behalf of the Company to close on the additional properties and subscribers, obtaining property consents, integrating acquired assets, fluctuations in operating results and operating plans, closing of certain other acquisitions, market forces, supplier negotiations and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission, including, but not limited to, the Company's 10-KSB for year ended September 30, 2008 filed on December 23, 2008, and incorporated herein by reference.
