Insight and Comcast Agree to Divide Insight Midwest Partnership
Insight Communications Company, Inc. and Comcast Corporation (NASDAQ: CMCSA, CMCSK) today announced that they have reached a definitive agreement to divide the Insight Midwest partnership in which Insight and a Comcast subsidiary each hold a 50% interest. By dividing the partnership, which Comcast inherited with the AT&T Broadband acquisition, Comcast will be able to convert its interest in the joint venture from a passive investment to a direct ownership in cash-flow generating cable systems. For 2007, Comcast expects the new systems to generate approximately $290 million in Operating Cash Flow.
Upon completion of the transaction, Comcast will own 100% of the cable systems serving Illinois customers in Rockford/Dixon, Quincy/Macomb, Springfield, Peoria and Champaign/Urbana, and Indiana customers in Bloomington, Anderson, and Lafayette/Kokomo. As of December 31, 2006, these systems passed 1.2 million homes and included approximately:
* 684,000 basic video customers
* 296,000 digital video customers
* 300,000 high-speed Internet customers
“We are very pleased to be receiving such well managed systems from Insight. This has been a great partnership, and we look forward to adding these new customers to Comcast and to begin introducing them to our suite of products and services,” said Stephen B. Burke, Comcast COO. “These customers are in key markets in which Comcast already has a presence.”
Insight will own 100% of the cable systems serving Kentucky customers in Louisville, Lexington, Bowling Green and Covington, and customers in Evansville, Indiana and Columbus, Ohio. As of December 31, 2006, these systems passed 1.3 million homes and included approximately:
* 639,000 basic video customers
* 325,000 digital video customers
* 308,000 high-speed Internet customers
“We have worked closely with Comcast to arrive at this agreement, which both parties agree is a fair and equitable one,” said Michael Willner, CEO of Insight. “This is a logical split for both companies. Comcast already has significant properties in Indiana and Illinois, so it makes sense for them to assume control over the systems in these states. Insight will operate a very efficient cluster in Kentucky, where it will continue to be the largest operator in the state, and in neighboring southern Indiana and in Columbus, Ohio.”
Comcast will be responsible for $1.335 billion, and Insight will be responsible for $1.260 billion of partnership debt.
Closing of the transaction is subject to closing conditions, including government and other approvals, and is expected to be completed by the end of 2007.
Comcast was advised by The Blackstone Group L.P. and Davis Polk and Wardell served as legal counsel. Dow Lohnes served as legal counsel for Insight.
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