Court to decide firmÃ¢â‚¬â„¢s fate
NEW YORK - Adelphia Communications has filed papers with the U.S. Bankruptcy Court here to approve a sale of its security arm to Innova Security Solutions for $38.2 million.
Innova, a unit of Boston-based private equityÃ‚Â firm Alta Communications, is the highest bidder in AdelphiaÃ¢â‚¬â„¢s search for a buyer, beating out 14 other parties in the sale. Adelphia, which has been under Chapter 11 protection since 2002, began searching for interested buyers for its security business - operated as Checkpoint Ltd. in Florida and Adelphia Security in New York - in April 2004 as part of the companyÃ¢â‚¬â„¢s effort to emerge from bankruptcy.
Ã¢â‚¬Å“One of the things we are doing is shedding non-core businesses,Ã¢â‚¬Â said Paul Jacobson, a spokesman for Adelphia. Ã¢â‚¬Å“Although it has been a good business, security is not part of the strategic planÃ‚Â for Adelphia, which is essentially a cable company.Ã¢â‚¬Â
Even though Innova has been identified as the highest bidder, the process is by no means complete. Under bankruptcy law, Adelphia is required to place its security business, which accounts for 60,000 subscribers, up for auction through the court to ensure the highest price.
Ã¢â‚¬Å“Our job as Adelphia management is to maximize the amount of money to pay off creditors,Ã¢â‚¬Â Jacobson said. Ã¢â‚¬Å“It is too early to conclude who the final purchaser will be through the court.Ã¢â‚¬Â
A hearing to approve auction rules was slated for Dec. 15, after deadline for Security Systems News, while any objections must be entered by Dec. 10. Interested parties have until Jan. 17, 2005 to place bids on the business, but minimum bids must start at $40.1 million to beat out Innova.
Vedica Jain, a senior associate at Alta Communications, declined to comment on the transaction, but did say that Innova began operating in 2004. According to information on Alta CommunicationsÃ¢â‚¬â„¢ web site, it has not previously invested in the security industry and to this point has focused on the media and telecommunications sectors. Jacobson said that Adelphia is confident on InnovaÃ¢â‚¬â„¢s ability to manage the businesses.
Ã¢â‚¬Å“Innova is very well respected,Ã¢â‚¬Â he said. Ã¢â‚¬Å“We have a good rapport with them and see them as a good industry leader.Ã¢â‚¬Â
For now, as the process in the courts continues to play out, Jacobson said whatever the end result, the company hopes that the businesses and its employees will continue on as normal.
Ã¢â‚¬Å“We anticipate no change in the day-to-day operations,Ã¢â‚¬Â he said. Ã¢â‚¬Å“And although we canÃ¢â‚¬â„¢t guarantee it, we hope all the security employees will remain employed after the deal is complete.Ã¢â‚¬Â