A Colorado-based cable TV, telephone and Internet company called WOW! is purchasing West Point, Ga.-based Knology in a deal valued at $1.5 billion, the firms said today.
The deal, which still must receive federal regulatory approval, could be a good one for Columbus-area cable customers who are accustomed to bundling their TV, phone and Internet services into one bill. Consumer Reports in 2010 gave WOW! — formerly known as WideOpenWest — and a couple of other minor players in the industry good marks.
“The major cable companies typically got average scores at best ...,” the consumer publication said. “However, a few small cable companies — notably Wow but also Insight and Bright House — got scores that rivaled those of the fiber (optic) companies.”
The report mentioned Verizon FiOS and AT&T U-verse as companies with fiber-optic abilities that “are challenging cable and satellite providers.”
Dave Troxel, general manager of Knology’s Columbus operation, declined comment on the buyout and its impact on local customers, with staff still digesting the details.
But Royce Ard, vice president of sales and market with Knology’s corporate headquarters, said he expects everything to be “business as usual” for both customers and staffers. It also is not known if the Knology name will be changed to WOW! in local markets.
“It’s still got a ways to go to get through all the regulatory hurdles and everything. A lot of that operational stuff just hasn’t been worked out,” said Ard, himself former general manager in the Columbus cable TV market, which also includes Mediacom and Charter. “But it’s going to take as many folks to operate that division in Columbus tomorrow as it does today.”
The cash acquisition has Englewood, Colo.-based WOW! paying $19.75 per share for all outstanding shares of Knology stock, which would amount to about $750 million. The balance of the $1.5 billion total includes the assumption of Knology debt.
WOW! is a private entity controlled by investment firm, Avista Capital Partners, which manages more than $4 billion in assets and has offices in New York, Houston and London. It has a presence in the Midwestern states of Illinois, Indiana, Michigan and Ohio.
Knology, on the other hand, is publicly traded on the Nasdaq Global Market exchange, with shares jumping $1.34, or 7.4 percent, to $19.39 today. The company posted a $48.2 million profit on total revenue of $518.5 million in 2011.
The merger gives WOW! entrance into the Southeastern U.S. without having to shell out tens of millions of dollars in infrastructure expense. Aside from Columbus, Knology’s markets include the Alabama cities of Dothan, Huntsville, Montgomery and Valley, along with operations in Augusta, Ga., Charleston, S.C., Knoxville, Tenn., Lawrence, Kan., the South Dakota communities of Rapid City and Sioux Falls, and the Florida cities of Panama City and Pinellas.
The combined customer count of WOW! and Knology will be 800,000, they said, with the company doing business in markets with a total of 2.8 million households in 13 states.