They’ve got the home improvement, gardening and cooking enthusiasts locked up, and now Scripps Networks Interactive will be a player in the vacation and leisure arena after cutting a megabucks deal with Cox Communications to acquire a majority stake in the Travel Channel.
Deal calls for Scripps, whose lifestyle-oriented cablers include Home and Garden TV, Food Network and DIY TV, to acquire 65% of the cabler from Cox. The companies will form a joint venture to house Travel, to which Scripps will contribute $181 million in cash. The joint venture will take on $878 million in debt that will be paid out in cash to Cox.
With Scripps’ cash contribution, the newly reorganized Travel Channel will be left with about $696 million in debt, Scripps said Thursday in announcing the deal, which is expected to close by January.
The pricetag for Travel Channel reinforces the value of strong cable outlets, which is welcome news to cable-rich congloms such as Time Warner, Disney, Viacom and News Corp. The auction of Travel Channel was closely watched by the biz as a gauge of the industry’s appetite for media M&A deals. News Corp. had been in the running for the channel but dropped out after the asking price approached $1 billion.
Travel Channel, which bowed in 1987, is available in 95 million cable and satellite TV homes.
Scripps Networks Interactive CEO Kenneth Lowe called the deal “a unique opportunity to meaningfully expand our portfolio into a lifestyle category that’s highly desirable to media consumers, advertisers and programming distributors.”
Scripps shares closed up 62¢, or 1.61%, to $39.23 Thursday.