Time Warner Cable is tightening its grip on key Midwestern markets with its deal to acquire cable operator Insight Communications for $3 billion in cash.The deal unveiled Monday will bring Time Warner Cable’s total subscriber count to about 14.75 million — which keeps it the nation’s No. 3 subscription TV provider behind Comcast (22.5 million) and DirecTV (19.4 million). Insight serves about 750,000 sub- scribers in Indiana, Ohio and Kentucky, markets where Time Warner Cable already had a strong footprint. Of those subs, about 537,000 are the high-speed data subscribers most coveted by cable operators. Insight has been owned since it went private in 2005 by private equity firms the Carlyle Group, Crestview Partners and MidOcean Partners as well as some of Insight’s top managers. “We believe in our business and its long-term prospects, and have long thought that Insight’s well-run, technologically advanced systems would fit well with our Midwest operations,” said TW Cable topper Glenn Britt in announcing the acquisition. TW Cable said it expected to squeeze $100 million in savings from programming expenses and other streamlined areas within two years of the deal’s closing. Research firm SNL Kagan noted that the pricetag was on the high end of recent cable acquisitions, but that the premium made sense for TW Cable because of the location and the fact that Insight’s properties have been recently upgraded. Wall Street had a lukewarm reaction to the deal, which was dwarfed by the concurrent announcement of Google’s $12.5 billion acquisition of Motorola. Time Warner Cable shares were down 49¢ at the close of trading to $65.02. Despite the all-cash transaction, TW Cable execs emphasized that the company would continue to pay a quarterly dividend to shareholders and continue with its $4 billion stock buyback program initiated last year.
Data provided by:Nielsen Media Research (Preliminary Results)