PrairieWave gets consolidated

West Point, Ga.-based broadband services provider Knology will pay approximately $255 million to consummate a merger with PrairieWave Communications in Sioux Falls, S.D.

The merger has been approved by the boards of directors of both companies and is expected to be completed by June 30, 2007. Rodger Johnson, president and CEO of Knology, said in a statement that the merger is part of a logical expansion that will strengthen his company’s regional presence in Middle America and improve its service offerings.

PrairieWave President and CEO Bruce Herman said that in addition to good timing, Knology offered his company “a unique way to maintain our local presence, which is extremely important to us, while offering us the opportunity to expand into new areas.”

The combined company will have a both a telecommunications presence and be among the 20 largest cable companies in the country. Knology has indicated that PrairieWave will remain headquartered in South Dakota and maintain its local presence there.

Daniels & Associates L.P. acted as advisor to PrairieWave for the transaction.

On January 11th, RBC Capital Markets announced the completion of its acquisition of Daniels & Associates, L.P. In its announcement, RBC cited data from Thomson Financial that said Daniels & Associates has completed more M&A transactions within the cable, telecommunications, broadcast and Internet services sectors in the United States from 2000 through 2006 than any other investment bank.

Knology provides interactive communications and entertainment services in the Southeast region to both residential and business customers, including more than 200 channels of digital cable TV, local and long-distance digital telephone service.

PrairieWave provides telephone, cable television, Internet, phone directory and cable advertising services for residential and business customers in South Dakota, Minnesota and Iowa. It has approximately 400 employees and 16 local offices. The company got its start as the Hurley Telephone Co. in 1902. It became Dakota Cooperative Telecommunications in 1952 and in 1999 became part of McLeodUSA.

Local management bought the company back in 2002. In 2004, PrairieWave launched its high-definition cable services and was the first to bring video-on-demand services to the region. It acquired Black Hills FiberCom in July 2005 along with its telephone directory companies in Rapid City and Billings, Mont.

The roots of Knology go even further. It was formed by ITC Holding Co. in West Point, which also founded InterstateValley Telephone Co., Powertel, ITC^DeltaCom, Mindspring and InterCall. InterstateValley was formed in 1896 as Interstate and Valley Telephone Co.

In 1999, Knology merged with IVT. It now serves Columbus, West Point and Augusta, Ga.; Huntsville, Lanett, Valley and Montgomery, Ala.; Panama City and Pinellas County, Fla.; Charleston, S.C.; and Knoxville, Tenn.