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Time Warner acquires Insight cable co
16 August 2011
Private-equity owners of Insight Communications agree to $3bn takeover deal from Time Warner
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Time Warner
Insight
cable
private equity
Carlyle
Time Warner Cable has entered a definitive merger agreement with private equity-owned Insight Communications, under which it will acquire Insight for $3 billion in cash. The deal will greatly benefit Time Warner as Insight has invested in considerable infrastructure improvements, including digital conversions and cable internet deployment.
The current owners of Insight include the Carlyle Group, Crestview Partners, MidOcean Partners, and members of Insight management, among others.
Time Warner expects Insight to have reduced capital requirements of 10%-12% of revenues upon the acquisition completion. Time Warner Cable believes the deal will eventually result in annual cost efficiencies of around $100 million through programming expense savings and other cost reductions.
Bank of America Merrill Lynch and UBS Investment Bank were the financial advisors for the deal, while Dow Lohnes was the legal advisor to Insight. Citigroup Global Markets was the exclusive financial advisor, while Paul, Weiss, Rifkind, Wharton & Garrison and Edwards Angell Palmer and Dodge were the legal advisors to Time Warner Cable.
Irene Esteves, CFO of Time Warner Cable, said: “We will continue to return excess capital to shareholders consistent with our target leverage ratio of 3.25x, including the impact of this acquisition on our existing and expected leverage.”
The deal is subject to expiration or early termination of the Hart-Scott-Rodino antitrust waiting period and receipt of FCC and franchise approvals, among other customary closing conditions. GTB