Continuum Sale FAQs*
The Towns of Mooresville and Davidson initiated the sale of Continuum in March 2019 based on the current success of the asset and the towns’ desire for financial flexibility to invest in infrastructure and other projects.
What was/is the timeline for this process?
The Towns of Mooresville and Davidson retained RBC Capital Markets as the exclusive financial advisor for the sale. The first round of offers was received on April 23, the second round of offers was received June 13. A deadline of June 21 was established for final offers. TDS Broadband Service LLC made the highest and most responsive offer received by the deadline. The Towns then entered into an exclusivity agreement with TDS to complete the contractual sales process. On August 13, the Town Boards of Mooresville and Davidson reviewed and approved an Asset Purchase Agreement with TDS. Pending voter approval at the November 5 referendum, transfer of ownership is expected to occur in the fourth quarter of 2019 or the first quarter of 2020.
What were the offer amounts?
Of the first round of offers received, six offers (all $70M+) were selected to move to the second round. The second round of offers ranged from $60M - $80M. The three highest and most responsive offerors were selected to move forward to give their final offer. The final three offers received by the deadline ranged from $75M - $80M.
Will the sale allow the towns to pay off all the outstanding debts related to Continuum?
Upon the closing of the sale, the installment financings debt balance of approximately $59 million will be paid off as will other current liabilities of Continuum. However, the sale proceeds will be insufficient to make up the amounts the towns have advanced to Continuum over time to subsidize the system.
Both towns have invested a significant amount - why would you sell Continuum now?
The towns deemed this to be the right time to sell. Continuum has grown to become a competitive digital network, making it attractive to potential buyers. Continuum’s value, coupled with the Towns’ desire to invest in new infrastructure for its growing population, makes it a very good time to pursue a sale.
How much cash will the two towns receive as the result of the sale? What will that money be used for?
The exact amount of the net cash funds for distribution to the towns cannot be determined at this point but will be determined after closing. The closing is expected to occur before the end of the calendar year or in the first quarter of 2020. Should the sale go through, the Town Boards will evaluate the options and make a decision about what to do with any proceeds from the sale.
How will the proceeds be divided between Mooresville and Davidson?
In accordance with their respective ownership percentages, Mooresville and Davidson will divide the net proceeds 70%/30%, respectively. However, Davidson must pay Mooresville approximately $1.75 million because Davidson has not paid its full 30% share of the amounts advanced to the system over time.
Will I receive a tax decrease/how will the sale affect my taxes?
The Town of Davidson has most recently budgeted $1 million per year to support the Continuum operation. Should the sale go through, the town board will evaluate the options and make a decision about what to do with the $1 million net benefit on an annual basis. There are a number of possible options: a tax decrease is one of the options, eliminating the solid waste fee is another option.
The Town of Mooresville has advanced greater sums to the system over time, from a low of $395,415 in 2010 to a high of $5,324,595 in 2016. The Board of Commissioners will likewise decide how best to adjust to the net benefit of having the financial burden of Continuum lifted.
What happens to the sale if the referendum fails in Davidson and/or Mooresville?
In order for the sale to proceed, the referendum needs to pass in both Davidson and Mooresville.
What will happen to Continuum between now and the Closing of the Sale?
Continuum customers will continue to receive their voice, internet and video services, pricing, and customer service to which they are accustomed during this period.
After the sale, will TDS honor the rates we are currently charged through Continuum?
TDS has not announced its rates but expects to offer competitively priced products and services. After the purchase, they will expect to evaluate all current offerings and look to improve upon them with new product packages and bundles, as well as, higher speed offerings and more entertainment content. Offering new and existing products at competitive rates is a critical component of their success.
Will my internet, cable and voice service be improved?
TDS expects to evaluate the overall network infrastructure and implement changes to prepare the community for growth. Planned technology investments would bring new options to customers to improve their overall broadband and entertainment experiences.
Will the TDS jobs offered to employees all be locally based or could some require people to move if they want to keep their job?
TDS intends to keep employees locally. The company wants to maintain excellent levels of customer support and technical operations to protect their investment.
As with all TDS employees, once colleagues from Continuum join the TDS family they would be able to grow within their career and could choose to apply for opportunities in other states or in other companies within the TDS family. For example, today, TDS Telecom has more than 200 open positions which could also include opportunities to work remotely and telecommute, not requiring relocation.
Does TDS plan to expand and offer more jobs in our community?
TDS will evaluate the need for more employees as expansion occurs.
Where can I find financial information regarding Continuum?
You can find financial information regarding Continuum at the following website: https://www.ci.davidson.nc.us/939/Financials
*These FAQs are provided by the Towns of Davidson and Mooresville in connection with the potential sale of the Continuum system.