Act III Of gut checks and cheques cut
The scene materializes in the lobby bar of a popular downtown hotel in Halifax, N.S., where Paddick roosts for a few hours before heading home to St. John’s to celebrate Christmas with his family. He and his wife Renee Vedd-Paddick, who hails from St. John’s, have three grown children, ages 21 to 27. He says he spends at least 200 days a year away from home and while that takes a toll, he can’t figure out any other way to pursue his professional passions.
“I always kid that behind every entrepreneur, whether successful or not, there is an ‘entremanure’ and the entremanure’s spouse is the one who puts up with the bullshit when things are going great and puts up with getting crapped on unnecessarily when things go bad,” he laughs. “That’s my wife. She’s kind of the rock of the household.”
The camera cuts to Renee, who offers her own observations on the fine and delicate balance that is her and her husband’s lives: “Brendan and I have no secrets between each other, which includes his business life as well. He has shared with me almost everything that is going on at work. Although he has always built great management teams, he actually loves to work on his own. He worked in his home office from about 2001 to 2008, so in many respects, I ended up being his sounding board. That certainly has its pros and its cons, but I would much rather be intimately involved as it better equips me to understand what stress he is under or what issues he is trying to deal with… We appreciate all of the outcomes of hard work and sacrifice but also make the most of our family times together, even if they are shorter or less frequent than we would like. Success is a privilege, not a right.”
Unuttered – at least by Brendan – is any word on the enormous amount of volunteer work he somehow finds time to perform. He’s a past president of the Victorian Order of Nurses, Newfoundland branch; Honourary Consul of Canada to the Bahamas; a member of the Rooms “Where Once They Stood We Stand” campaign cabinet; a major benefactor of the “Home From the Sea” Sealers Memorial in Elliston, N.L.; a member of Rainbow Riders “Raise It Up” capital campaign cabinet and a major sponsor of Team Broken Earth in Haiti.
He once described his biggest accomplishment this way: “In a strange kind of way, (it) is remembering and appreciating my roots. I have had the privilege of working and traveling throughout the world, but Atlantic Canada and Newfoundland and Labrador, in particular, will always be home. My wife Renee and I are huge fans of the Newfoundland arts community. We are fortunate to count amongst our good friends the likes of Alan, Sean and Bob from Great Big Sea, Barry Canning, Andrew O’Brien, Geri, Andrew and Phil from The Once, Allan Hawco, Cory Tetford, Mark Critch, David Blackwood and on and on. . . And all of them and many more are such incredible, proud goodwill ambassadors for Atlantic Canada. We store our keepsakes of Newfoundland in our heart and soul.”
Price Hick Muse Tate & Furst paid to acquire Persona Communications in 1998
Still, as he talks today, it’s clear you can’t take the cable out of the ultimate cable guy. He’s downright jazzed by the opportunities now before him — almost as much, in fact, as his equity comrade, John Risley, is about him:
“He is a great partner for me. Where I am impatient, he is measured. Where I gloss over details he picks his way through them, seldom missing anything. When I get emotional and excited, he stays calm and cool. When I start talking about technology in detail or specifics which are close to nonsense he doesn’t expose me as uninitiated or just plain ignorant but politely fills the gaps and corrects the message… We can both disagree with one another, get angry at each other and five minutes later bury the hatchet and move on.”
Moving on, and upwards, is, of course, the point. And as Paddick explains, it has been ever since the Cable Bahamas deal led to the formation of Columbus International.
“We followed that initial purchase of Cable Bahamas with a US$125- million acquisition of the Cable Company of Trinidad & Tobago in August 2005,” he says. “By that time we had exhausted our own personal financial resources but we didn’t stop there. John Risley and I were pounding the streets of New York in early Fall 2005, looking to sell our story to any private equity firm that would listen. Opportunities were limitless, but equity was not and we were already leveraged to lunar heights. John got an email from Jamaican-born, Canadian-schooled, AIC mutual fund founder and billionaire, Michael Lee-Chin saying he had heard about our investments in Jamaica and he wanted to be a part of it. He did not seem as concerned as the tassel-toed New York private equity guys about the prospects for Columbus as the 53rd cable TV company in Jamaica. We cancelled our next few meetings and flew straight to Toronto. In the end, we brought in a couple of strategic private equity sponsors, Michael Dell (of Dell Computer fame) and Michael Lee-Chin on the same day we closed the acquisition of New World Networks for US$130 million.”
New World (now Columbus Networks), he explains, was a US$450-million, 8,400 km subsea fibre network that connected Florida to Mexico to Central America to Puerto Rico to Dominican Republic and The Bahamas. With these core assets in hand, the company invested heavily in both acquisitions and capital expenditures to augment and upgrade the existing network and expand into new markets.
“For example,” he says, “in 2006 we invested US$45 million to build a subsea fibre from Jamaica to the Dominican Republic to connect into our existing subsea network. In 2007 we built a US$35-million subsea network from Curacao to Trinidad and in 2009 we invested close to US$100 million to build a subsea fibre express route from Colombia direct to Boca Raton, Florida. From 2005 to 2014, we negotiated, financed, closed and integrated 38 acquisitions of cable TV companies, network operators, IT solutions providers, data centre operators and subsea fibre operators and invested US$1.4 billion in infrastructure.”
All tallied, he grins, the results since 2005 have been downright heartwarming: from two employees (he and John Reid, from Gander, N.L.) to over 3,200; from operations in one country (The Bahamas) to 42; from virtually no subsea network to over 42,000 kilometers of “big pipe”; from virtually no terrestrial fibre network to over 38,000 kilometers of it; from no business customers to over 20,000; from no residential customers to over 700,000; from scrambling to make payroll to issuing US$1.25 billion of corporate bonds; from beating the streets trying to sell the Columbus story to counting John Malone, perhaps the telecom industry’s most successful and respected baron, amongst their shareholders and friends.
Now, with the deal to merge with Cable & Wireless, he says, “we will attempt to bring together two diametrically opposite cultures. On the one hand, a 150-year-old, heavily unionized, incumbent telco that has spent most of its corporate life in a monopoly position with a public shareholder base that is focused on dividend yields, while on the other hand an entrepreneurial, irreverent, disruptive, new market entrant that has grown up internally celebrating its successes at the expense of the entrenched incumbents.”
Indeed, he adds, the integration of these two organizations represents the epitome of both challenge and opportunity, as the combined company grows from 700,000 retail customers to over six million, from 20,000 corporate customers to more than 110,000, from 3,200 employees to close to 7,500 and from revenues of US$600 million to over US$2.5 billion.
Even with that seeming magnificence of scale, they’ll still be a small fish in a big pond. Their biggest competitor in the Caribbean is Ireland-based Digicel with 14 million mobile customers (133 per cent larger than the new entity’s total client base). In Latin America, they’ll be going head-to-head with the who’s who of the telecom space: American Movil/Telmex, Telefonica, Millicom, AT&T, Verizon, and others, all of them equally fixated on market growth.
These mammoth competitors aren’t their only, or biggest, challenge. Says Paddick: “Quite frankly, everything is a challenge in building our business — raising capital in emerging markets, recruiting world class talent, navigating government and regulatory bureaucracy in 40-plus countries, executing on significant capital expenditure plans, identifying new growth markets, negotiating and closing acquisitions.”
However, Paddick — with his bloodhound-like ability to sniff out opportunity — has already identified the new company’s strategic advantage: the marriage of next generation LTE mobile networks to fibre-rich terrestrial and subsea networks. “That,” he asserts, “is an unstoppable combination.”
Curiously, despite his obvious vision for the new entity and his near 30 years of proven leadership prowess, Brendan Paddick will not be the CEO of the Columbus/Cable & Wireless operation. Though Columbus negotiated significant governance rights as part of the deal (three of 10 Board seats, two of four seats on the Board Integration Committee, Columbus employees leading the three main business groups — retail quad-play, wholesale subsea networks and business solutions — as well as the office of integration management), Paddick won’t have an executive role. Instead, he’ll join Risley (the single largest shareholder) and John Malone on the Board, and he’ll work with the new CEO in an advisory capacity.
“If things go right, which I hope they will, I will do as much as is asked of me. If things go wrong, I will do as much as is necessary,” he says.
But is it worth it?
The camera pans in close to capture an impish grin.
Beats selling cable TV door-todoor, it implies.
Fade to black.