* Including debt, deal valued at $1.5 bln
* Offer at $19.75/shr; 9 pct premium
* Knology shares rise 8 pct
April 18 Regional cable operator Knology Inc
will be bought by a unit of Avista Capital Partners for
about $750 million plus an equal amount in debt, as the private
equity firm adds cable assets in southeastern and midwestern
The deal gives Avista's WOW Internet, Cable & Phone unit a
broader presence in the Midwest markets and increases its
subscribers to 800,000, which otherwise would have cost much
"The cost (of establishing a network) is just too expensive
and that's what makes Knology valuable," said Hamed Khorsand, a
BWS Financial analyst.
Knology's fiber network lowers the cost of entry into the
southeastern and midwestern markets for WOW, Khorsand said.
Last year, Time Warner Cable bought Insight
Communications from the Carlyle Group for about $3
billion to expand its presence in the U.S. Midwest.
Founded in 2005, Avista Capital Partners invests primarily
in growth-oriented healthcare, energy, and media companies. It
has more than $4 billion in assets under management.
Cable companies are loved by private equity firms for their
steady subscription revenue.
Knology traces its roots to Interstate and Valley Telephone
Co and started providing telephone services in Georgia and
Alabama in 1896. It went public in 2003.
As per the deal, WOW will acquire Knology for $19.75 per
share, a premium of 9 percent to the stock's Tuesday close.
The offer is at a 25 percent premium to the stock's close on
Feb. 27, before media reports said Knology could be exploring a
sale of the company.
WOW offers cable and Internet services in Michigan,
Illinois, Ohio and Indiana.
Credit Suisse, Morgan Stanley, RBC Capital Markets, SunTrust
Robinson Humphrey and Bank of Tokyo-Mitsubishi UFJ have
committed debt financing for the deal.
Knology shares rose 8 percent to $19.54 on Wednesday on the