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Cable Technology Feature Article

June 14, 2010

Cablevision Set to Acquire Bresnan Communications for $1.4 Billion

By Susan J. Campbell, TMCnet Contributing Editor

In the land of telecommunications, there is nothing as common as the words mergers and acquisitions. The latest marriage of two companies is set to take place between Cablevision Systems Corp. and Bresnan Communications.

According to new reports, Cablevision will buy Bresnan Communications from Providence Equity Partners (News - Alert) in a deal is estimated to be worth nearly $1.4 billion. Bresnan is the third largest MSO and owns cable operating systems in Colorado, Montana and Wyoming that currently serve more than 300,000 subscribers.

Cablevision President and CEO James L. Dolan said in a statement: 'We believe the acquisition of Bresnan is an excellent opportunity to leverage Cablevision's strong management team and build shareholder value. Bill Bresnan was a cable legend and was close to so many in the industry, including the Dolan family. The Bresnan team has built an impressive cable business that performs well financially, and we look forward to working to enhance those systems further.'

When this transaction is complete, Cablevision is expected to gain advanced cable systems that serve more than 300,000 basic subscribers through high-quality services delivered directly to the user. Such services include digital television, high-speed Internet and voice, all carried across an upgraded fiber-optic coaxial network.

Cablevision's Chief Operating Officer Tom Rutledge will oversee the Bresnan properties. Mr. Rutledge said: 'Bresnan is a well-managed company that has invested wisely in its operations and has pursued a strategy which is aligned and quite similar to Cablevision's.

"We look forward to building on Bresnan's record by pursuing among other things: broader deployment of digital voice; the addition of more high-definition television offerings; the expansion of our groundbreaking Triple Play (News - Alert) offer; and, the rollout of new services that have already shown great promise,' Rutledge added.

Cablevision has laid out a plan that includes the creation of a newly-formed, unrestricted subsidiary with standalone financing. It is this entity that will acquire Bresnan. The new entity will be financed with non-recourse debt of roughly $1 billion and an equity investment by Cablevision of less than $400 million.

'Since the early days of our industry, the Bresnan name has stood for exceptional performance and an unflinching commitment to customers, colleagues and community,' said Jeffrey S. DeMond, Bresnan's President and CEO.

'I could not be more proud of our team's accomplishments, nor more appreciative of the support of our great partners. Bill Bresnan would have agreed, and I speak for the entire family of Bresnan employees in expressing our confidence that Bresnan will enjoy continued success as part of the Cablevision family of companies.'
This transaction is expected to be complete in late 2010 or early 2011 and is subject to customary closing conditions and regulatory approval.

In March, Cablevision announced, along with Time Warner (News - Alert), to provide free Wi-Fi hot spots to subscribers throughout the New York City area. And in an agreement, customers from both companies will have access to each other's Wi-Fi networks in the Tri-State area, vastly increasing the amount of available hot spots.

Cablevision management is scheduled for a call this morning, 11:15 a.m. ET on Monday, June 14, 2010. All investors and members of the media are invited to listen in for more details on this transaction.

Susan J. Campbell is a contributing editor for TMCnet and has also written for eastbiz.com. To read more of Susan's articles, please visit her columnist page.

Edited by Stefania Viscusi