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Airthread Case

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Stewart Fish, Menting Xu, David Dowdy Executive Summary Over the past decade, significant changes in regulations, advances in technology, and shifts in competitive dynamics began transforming the cable industry. Companies within the industry were forced to adapt by acquiring economies of scale and scope. American Cable Communication was seeking to acquire AirThread Connections for three reasons. The two companies could help each other become more competitive in an industry that is moving toward bundled package service offerings. The acquisition would help both companies expand into the business market, and lastly American Cable was in a unique position to add value to AirThread’s operations. They could obtain a significant amount of …show more content…

According to Stafford and Heilprin, “American Cable Communications (ACC) was one of the largest cable operators in the United States (AirThread Case).” ACC serviced roughly 24.1 million video subscribers, 13.2 million high-speed internet subscribers, and 4.6 million landline telephony subscribers. In 2007, ACC saw revenues of $30.9 billion and had net income equaling $2.6 billion. In order to adapt to the changes in the industry, ACC started aggressively acquiring smaller companies, which resulted in huge customer growth and the development of, “a strong corporate finance team with significant acumen in identifying, valuing, structuring, and executing corporate control transaction (AirThread Case).” That being said, ACC has set its sights on yet another company--AirThread Connections--with the expectation of further revenue growth and customer acquisition and retention. AirThread Connections is a wireless network provider that distributes to more than 80 million people across the United States. According to Stafford and Heilprin, “AirThread Connections (ATC) was one of the largest regional wireless companies in the United States, providing service in more than 200 markets in five geographic regions (AirThread Case).” In 2007, ATC had $3.9 billion in revenue and approximately $400 million in operating incomes. On top of that, ATC had, “an extensive set of roaming agreements with other carriers to provide its

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