Comcast announces two deals
It said acquiring a Princeton cable firm and splitting a partnership would boost cash flow.
Comcast Corp. has struck two deals - an acquisition and the unwinding of a partnership - that it says will add cable subscribers and cash flow.
Comcast plans to announce today an agreement to acquire Patriot Media & Communications, a Princeton cable company with about 81,000 video subscribers, for roughly $483 million.
Yesterday, it announced plans to split up a long-standing cable TV partnership in which it had shared Midwest systems with Insight Communications Co. Inc., of New York.
With Patriot, Comcast will acquire systems in central New Jersey, including Princeton, and other operations in Somerset, Hunterdon, Morris and Mercer Counties.
Patriot is a privately held company owned by cable veteran Steven J. Simmons, Spectrum Equity Investors and Spire Capital. Simmons began Patriot in 2002 by buying several cable systems and always planned to sell it.
"We are really very proud of everything we've done," said Simmons, whose company won the Independent Cable Operator of the year award last year from CableWorld Magazine, in part because of its high-quality system.
Simmons, who also worked in the White House under President Jimmy Carter and has written five children's books, said he was not sure what he would do next.
Comcast chief operating officer Stephen B. Burke said his company was attracted to Patriot because its "systems are fully upgraded, have superior demographics, strong penetration of advanced products and, best of all, they geographically complement our systems in New Jersey."
The transaction remains subject to regulatory approvals. It is expected to close in the third quarter of 2007.
The Insight deal stems from Comcast's 2002 acquisition of AT&T Inc.'s cable systems. Comcast and Insight had jointly owned systems but now are splitting them up, as they had been expected to do since early last year.
By dividing the systems, Comcast converts the Insight systems from a passive to an active investment. The Philadelphia company will get a new source of cash from 684,000 basic-cable customers, 296,000 with digital video and 300,000 with high-speed Internet. Comcast will take on $1.34 billion in debt.
Insight will keep networks with about 639,000 subscribers in parts of Kentucky, Ohio and Indiana, and will assume $1.26 billion in debt.