Adelphia Gains Virginia Subscribers - TheStreet

Adelphia Gains Virginia Subscribers

The cable company inked deals worth a total of $836 million.
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Cable operator

Adelphia Communications

(ADLAC)

said Tuesday that it reached agreements to pick up 155,000 subscribers in Virginia in deals worth a total of $836 million.

Coudersport, Pa.-based Adelphia said the agreement to acquire

GS Communications

, among others, will bring its total subscriber base in Virginia to around 700,000.

The deal is only the most recent for Adelphia, which has nearly tripled its size over the last year. In December, Adelphia closed more than $9 billion in acquisitions, including buys of

Century Communications

,

FrontierVision Partners

and

Harron Communications

. Adelphia currently claims around 5.6 million subscribers.

The Adelphia deal is somewhat surprising, said Thomas Eagan, cable and satellite analyst at

PaineWebber

, who said he wasn't expecting more consolidation in an industry that has been engulfed by it recently. Several big cable operators -- Adelphia among them -- are still digesting previous acquisitions, so another deal wasn't necessarily in the offing, Eagan noted. Cable stocks in general have been lower recently, which also lessened the likelihood of a deal.

That said, Adelphia's announcement about the purchases Tuesday does fit into its overall strategy. "The name of the game here is building up clusters," Eagan said. He rates the company an attractive. PaineWebber has not done any underwriting for Adelphia, the nation's sixth-largest cable operator.

The deal is costing Adelphia around $5,400 per subscriber, a number Eagan says is a little high.

AT&T

(T) - Get Report

, for example, paid $4,600 for each

MediaOne

cable home, but even that is higher than what had been the $2,000 that had been the historical standard before the cable consolidation binge over the last year.

Adelphia shares rose 1 1/8, or 3%, to 45 in trading Tuesday.

The company said it expects the deal to close in the fourth quarter of 2001.