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Insight Communications to Go Private

Jul 29, 2005  •  Post A Comment

Insight Communications, a cable operator with about 1.3 million basic cable subscribers, announced Friday that it has entered into a definitive agreement with the company’s founders to take the company private in a $710 million all-cash buyout.

The move makes Insight the latest in a string of cable companies to abandon the public markets, where the reception for cable stocks has been cool the past couple of years. Cox Communications went private late last year, and the controlling Dolan family has proposed to take Cablevision Systems private.

Under the terms of the Insight deal, Insight Acquisition Corp. agreed to pay shareholders $11.75 a share, representing a nearly 29 percent premium over the six-month average closing price of Insight shares. Insight Acquisition Corp. is an entity formed by Insight founders Sidney Knafel and Michael Willner, the company’s chairman and CEO, respectively, and by The Carlyle Group, a private-equity firm. Mr. Knafel and Mr. Willner collectively own 14 percent of the company, but control 62 percent of the voting power.

Insight also reported Friday that it narrowed its second-quarter loss to $732,000, from year-earlier red ink of more than $7.5 million. Revenue advanced 11 percent to $279.3 million, driven by gains in high-speed data customer growth and higher basic-cable rates.

The company said it lost 14,200 basic-cable subscribers, but posted a small increase in digital-cable subscribers to bring the digital penetration rate up to 38 percent. The company also added 4,900 new telephone customers to bring the total to 73,500, or 10 percent of the marketable homes passed.