Cablevision to Acquire Bresnan for $1.37 Billion

Chandrasekhar Atreya
14 Jun, 2010
New York City

Cablevision Systems Corp has agreed to buy Bresnan Communications Co, owned by Providence Equity Partners Inc, in a definitive agreement for $1.365 billion to expand its services in the western U.S.

[R]Cablevision Systems Corp has agreed to buy Bresnan Communications Co, owned by Providence Equity Partners Inc, in a definitive agreement for $1.365 billion to expand its services in the western U.S.[/R]

The offer is about 8.3 times Bresnan’s EBITDA of 2009.

Bethpage, New York-based Cablevision, the nation’s firth-largest cable operator, will add Bresnan’s more than 300,000 cable and broadband subscribers in Colorado, Montano, Wyoming and Utah, the companies said today. Cablevision also announced a $500 million share buyback program.

Cablevision will buy Bresnan through a newly-formed subsidiary with standalone financing, the companies said. The subsidiary will be given no more than $400 million by Cablevision and will issue about $1 billion in debt to fund the transaction.

Acquiring Bresnan will give Cablevision a bigger slice of the burgeoning market for high-speed Internet services, where revenue is expected to rise to $210 billion globally in 2014 from $164 billion in 2009, according to ABI Research in Oyster Bay, New York. Cablevision Chief Operating Officer Tom Rutledge will oversee the Bresnan properties.

Providence hired Credit Suisse Group AG and UBS AG to sell the company. Cablevision hired Citigroup Inc. as its lead financial advisor, along with Bank of America Merrill Lynch and Guggenheim Securities LLC. Comcast Corp agreed to sell its 30% stake in Bresnan as part of the deal, said a spokeswoman for Comcast.

Bresnan, was founded in 1984 by William Bresnan to operate cable systems in the Upper Midwest, before focusing on the Rocky Mountain states. He repurchased the company in 2003 for $525 million with backing from Providence and died last year due to complications arising from cancer.

Jeffrey DeMond, a long-time executive who served as chief financial officer and president, has been CEO since last year.

Cablevision fell 55 cents, or 2.4%, to $22.85 at 9:52 a.m. in New York Stock Exchange composite trading. The stock had gained 9.8% this year before today.