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In the 1980s and early 90s, independent cable companies were hot properties for speculators and investors looking to buy low and sell high. But as the marketplace has become increasingly concentrated, the days of flipping cable companies for big profits are long gone.
But a few independent holdouts remain. Bresnan Communications, the 17th largest cable company was sold last year to Cablevision Industries (8th largest). Now Insight Communications, the 9th largest operator, is up for sale by its private equity owners Carlyle Group, MidOcean Partners and Crestview Partners.
Insight serves just over 760,000 customers in Kentucky, Indiana and Ohio. Originally, the company operated as Insight Midwest, a partnership between co-owners Comcast and Insight. When the partnership between the two companies ended, Comcast took most of Insight’s customers in Indiana and Illinois and converted them to Comcast service. The remainder have been served by Insight.
The deal to sell Insight is being managed by Bank of America-Merrill Lynch and UBS AG and is being pitched to much larger cable operators with a price tag of $3.5 billion to $4 billion.
That’s too rich for Time Warner Cable’s blood. The nation’s second largest cable operator was interested in acquiring Insight, but not at those prices. Another potential buyer could be Comcast, which has a significant part of the midwestern market, especially in Illinois.
Insight has been on the sales block before — the last time in 2007 when Carlyle Group found no buyer interested in the systems at their asking price.
Other stories of interest:
- Insight Leaves 300,000 Louisville Customers With Frozen Pictures for Nine Hours – No Refunds (Unless You Ask)
- Wall Street Smells Money – JP Morgan Bullish On Cable: Time Warner Cable & Comcast Ready To Earn More From Broadband
- It Begins: Wall Street Analyst Calls for Comcast & Time Warner Cable to Merge
- When Competition Isn’t: Comcast<->Clearwire<->Time Warner Cable
- Louisville, Kentucky Says Hello to Cable Competition from AT&T U-verse, But Long Term Savings Remain Elusive
[...] For many Insight subscribers, it means another new owner. Most of Insight’s customers have been cobbled together from other cable systems, including Tele-Communications, Inc., AT&T Cable, Comcast, and even a few former Time Warner service areas. For the past several years, Insight has been run under the ownership of equity investment firm Carlyle Group, which has treated it as an investment, waiting to be sold off to the highest bidder. In 2007, Carlyle found no buyers willing to meet their asking price, and it appeared this year’s negotiations were headed in the same direction, as Time Warner Cable (among others) dismissed the $4 billion asking price as overpriced. [...]