The move will add 750,000 customers to the cable distribution system's base
Time Warner Cable will acquire Insight Communications for $3 billion in cash, adding 750,000 customers to its base, the company announced on Monday.
"We believe in our business and its long-term prospects and have long thought that Insight's well-run, technologically advanced systems would fit well with our Midwest operations," said Glenn Britt, Chairman and CEO of Time Warner Cable. "With the deal announced today, we are able to acquire those systems at an attractive price that is consistent with both our disciplined approach to M&A and our capital allocation strategy."
It is the first major move by the cable operator since separating from Time Warner in 2009.
Insight's customers are mainly in Indiana, Kentucky and Ohio. Insight's customers comprise approximately 537,000 high-speed data subscribers, 679,000 video subscribers and 297,000 voice subscribers.
Time Warner Cable believes that, after incurring one-time costs and capital expenditures, it will create annual cost efficiencies of approximately $100 million through programming expense savings and other cost reductions. The company expects to realize the bulk of the savings within two years of closing.
Insight is currently owned by the Carlyle Group, Crestview Partners, MidOcean Partners, members of Insight management and others. Carlyle and Insight management took the company private in December 2005, and Crestview and MidOcean purchased a significant stake in the company in April 2010.
Time Warner currently has a customer base of 14 million.