DAVIDSON – Specifics about the possible deal are not expected to be released until later this week, but a potential buyer has been identified for the Continuum Communication System jointly owned by Davidson and Mooresville.
According to a formal public notice, the Davidson town board will hold a public hearing to consider approval of the sale of Continuum – a regional provider of cable television, internet and communication services the two towns acquired in 2007 – during its meeting on Tuesday, Aug. 13. The meeting will begin at 6 p.m. at town hall.
The notice included no information about the potential buyer or proposed transaction terms, but those details are expected to be shared prior to the Aug. 13 meeting.
If the Davidson board endorses the sale, the action would be subject to the approval of voters in a town-wide referendum in November. Similar procedures would also take place in Mooresville.
The public hearing will be the first open discussion about the potential sale of Continuum since the March decisions by both the Davidson and Mooresville town boards to hire an outside financial adviser to supervise the sale and search for a suitable buyer. At that time, officials in both towns cited favorable market conditions and the appealing status of Continuum – with multiple service upgrades and 17,000 customers in Mooresville, Davidson and Cornelius – as factors in deciding to put the company on the market.
“The time is right to sell,” Mooresville Mayor Miles Atkins said in March.
And in Davidson, Town Manager Jamie Justice told commissioners, “Overall, market conditions are favorable.”
Adopting a 70-30 split of financial responsibilities, Mooresville and Davidson initiated the purchase of the assets of a bankrupt cable television provider in 2007, eventually acquiring $92 million in debt for the acquisition and subsequent deal adjustments. The original name of the company was MI Connection, which was changed to Continuum in 2017.
In 2013, the town’s adjusted their agreement, allowing Davidson to make annual payments of $1 million instead of 30 percent of the debt, with the understanding Mooresville would be reimbursed for the outstanding difference as part of a future settlement.
A summary provided in March indicated that as of early this year, Davidson had spent about $12 million and Mooresville $28 million to finance ownership of the company.
From the outset, the acquisition of the cable company was controversial. In Mooresville in 2007, commissioners deadlocked 3-3 on the final vote. Mayor Bill Thunberg cast the deciding vote in favor of the purchase and that action was cited as a reason Thunberg lost a subsequent bid for a new term.
In Davidson, the town’s ownership role in Continuum debt and the annual $1 million obligation – about 8 percent of Davidson’s $12.6 million 2019-20 operational budget – have been regular topics of debate and criticism, especially during municipal budget and capital expenditure discussions.