Dutch Treat For The Wolf At Excite@Home's Door?

Essent Kabelcom, the second-largest cable operator in the Netherlands, says it is plunking down an unspecified chunk of change to gain 100 percent control of @Home Benelux. Is it enough to make-good on notes due today?

by Michael Singer of siliconvalley.internet.com [August 31, 2001]

Amsterdam-based @Home Benelux was a three-year joint venture between Essent, Redwood City, Calif.-based Excite@Home and investor Intel Capital. Before the buyout, the U.S. company's joint investments totaled less than 30 percent of a stake in @Home Benelux.

The company currently serves some 1.6 million Dutch cable and high-speed Internet subscribers. Essent execs are hoping to expand into this emerging market with new services.

"We look forward to continuing to serve customers who value high-speed Internet access and to strengthening our current offerings," says Essent Kabelcom acting CEO Paul Ummels.

Separately, Excite@Home and Essent also announced that they have formed a new strategic alliance under which Excite@Home will continue to provide core technologies and broadband services to @Home Benelux.

Under this new relationship, Excite@Home will receive a regular paycheck from Essent for technology licensing fees as well as from providing technology solutions.

"We are entering into a business relationship that will create benefits for our partners and us, including ongoing, recurring revenue opportunities," says Excite@Home chairman and CEO Patti Hart. "This model is a good example of how we envision other relationships with cable operators could be structured; ultimately making Excite@Home a provider of business-to-business services for last-mile owners."

By shedding its investor role, Excite@Home will now be able to advise Essent how to best improve on its business.

Excite@Home's other joint venture outside of North America is in Japan.

Other angles by angels
Earlier this week The Wall Street Journal reported that former White House chief of staff Thomas "Mack" McLarty and some of his associates may be opening their wallets to help the cash-strapped broadband Internet service provider.

Excite@Home says the report is just a rumor and refuses to comment on the news. Regardless, investors seemed to be impressed by the suggestion that McLarty may help bail ExciteAtHome out. Nearly 1.1 million shares traded early Wednesday bringing the company's stock up 50 cents from its close of 39 cents.

According to the WSJ's sources, McLarty and friend Ranch Kimball are teaming up with private equity partners to take either a minority or majority stake in Excite@Home. Either way, company execs have been notified of the interest, say the sources.

McLarty is best known for working with the Clinton administration serving from 1994 to 1999 as his chief of staff. He currently serves as an advisor at the consulting firm of Kissinger, McLarty & Richardson. Excite@Home could certainly use the help. After a report that raised the "substantial doubt" that the company could continue forced the dismissal of the company's auditing firm, creditors began lining up demanding that they pay up some $50 million in notes today.

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