http://www.nj.com/business/index.ssf/2010/06/cablevision_goes_national_with.html
Cablevision Systems said yesterday it will acquire Bresnan Communications — the nation’s 13th-largest cable operator with systems in western states — for $1.37 billion.
It marks a departure from Long Island-based Cablevision’s strategy of focusing on the New York metro market. During the late 1990s, the firm divested its service territories in other parts of the country in favor of regional clustering.
Cablevision has more than 3 million subscribers in New Jersey, New York and Connecticut. Acquiring Bresnan would add about 300,000 basic subscribers in Colorado, Montana, Wyoming and Utah.
Cablevision scooped up Bresnan in a bidding war with other cable operators, including Charter Communications and Ascent Media Corp., which is controlled by the media mogul John Malone. It also outbid private equity firms such as TPG Capital and BC Partners.
The Dolan family, which controls Cablevision, had been close to Bresnan’s late founder, Bill Bresnan, for several years. The two firms will likely achieve a synergy, analysts said, because they pursued similar growth strategies over the last few years.
Bresnan is majority owned by Providence Equity Partners, which began exploring a sale of the mid-size cable operator in March. Comcast also had a 30 percent stake in the firm before yesterday’s deal.
Cablevision will acquire Bresnan through a newly formed subsidiary with standalone financing — a move analysts say will protect shareholders from risk.
Though Cablevision will borrow most of what it needs to fund the deal — which is valued at nearly nine times Bresnan’s earnings — analysts said the move will pay off in the long term.
"It fuels confidence in the company," said David Joyce, an analyst at the trading firm Miller Tabak & Co. in New York City.
He added Bresnan has little competition from large telecommunications firms such as Verizon, whose FiOS service is largely unavailable in the mountain states. The deal will also give Cablevision a larger slice of the market for high-speed internet, where revenue is expected to jump to $210 billion globally by 2014, up from $164 billion in 2009, according to ABI Research.
Amid a period of consolidation in the media and communications industry, Cablevision signaled to investors that it won’t go on a buying spree by also announcing that it will buy back $500 million worth of its shares.The acquisition is expected to close later this year or by early 2011.
Venuri Siriwardane may be reached at (-REDACTED-) or (973) 392-5994.
Cablevision goes national with $1.37B acquisition
Member #: 10075
Registered: 1996-2001
Posted:
416
Name:
Dale
Occupation:
Project Manager/Sweep Technician
There are 0 replies to this message
