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Archive for Wednesday, August 4, 2010

Knology statement on its pending purchase of Sunflower Broadband

August 4, 2010

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Subsequent to quarter end, Knology executed a definitive agreement to acquire the assets of Sunflower Broadband ("Sunflower"), a provider of video, voice and data services to residential and business customers in Douglas County and Lawrence, Kansas for $165 million cash. The transaction is expected to close during the fourth quarter of 2010, subject to certain closing conditions, including regulatory approvals.

Sunflower is expected to generate approximately $51 million in revenues and $22 million in EBITDA, pre-synergies, for calendar year 2010. Synergies are expected to be approximately $5 million. The contemplated transaction is structured as an asset purchase and provides Knology with a valuable step-up in the tax basis of the assets acquired.

Knology expects to fund the proposed transaction by using a portion of its cash on hand and by accessing the capital markets in a manner which will allow it to manage the leverage profile of the business, while maintaining the flexibility to continue to grow the business with a disciplined approach.

Highlights of the Sunflower transaction include:

-- Acquisition of a very well managed business with solid operational and financial metrics

-- Maintains Knology's strategic niche, operating in secondary and tertiary markets with favorable demographics and positive economic growth characteristics

-- Consistent culture and value system with focus on customers and employees

-- Similar hybrid fiber/coax network architecture

-- Incumbent cable operator, adding approximately 54,000 homes passed to Knology's existing footprint and approximately 105,000 RGU's to Knology's operations

-- Geography offers attractive edge-out possibilities, tack-on acquisition and larger acquisition opportunities bridging Knology's southeast and upper Midwest footprints

SunTrust Robinson Humphrey is acting as financial advisor to Knology and RBC Daniels is acting as financial advisor to Sunflower Broadband. Credit Suisse and SunTrust Robinson Humphrey have fully committed to provide the required debt capital for the contemplated acquisition by Knology of Sunflower Broadband.

Comments

cdecoito 3 years, 8 months ago

If you are interested in Knology rates, check out their website and read up. They are far more affordable than Sunflower, and they don't have ridiculous bandwidth caps that can cost several customers hundreds of dollars in overage charges. Sunflower is far and away one of the most expensive cable/broadband companies in comparison to others that serve areas in the midwest, in counties the size of ours. And they got away with it for so long becaues there was no competition to drive their rates down. Now that there is a larger corporation involved and several competitors, one could argue that we will only see costs (long term) go down.

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bearded_gnome 3 years, 8 months ago

Logicman, problem is: they're admitting right here that to buy lil' ol' Sunflower broadband, they're goin' inta a lil debt. guess who'll be a'payin' the interest?

them georgia boys puts up a little money, charge us to buy our system, they gets thar money back quick, our rates jes don't go down never.
maybe that helps esplain the bidness speak?


I am quite sad to see this sale take place. Sunflower has been a wonderful provider and apparently a good local employer. I've generally been pleased with their service.

does anyone think that "Knology" will really keep the same or more employees on the lawrence payroll?
... yeah riiiight.

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TrooGrit 3 years, 8 months ago

he he he...he he he...haw haw haw....wow, lol lol...I'm so freaking laughing....ho ho ho. As bugs bunny said, " what a bunch of saps"...woohoo woohoo, lol.

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madhatter 3 years, 8 months ago

When do we get 3D 46 inch flat screens as a subscriber incentive?

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madhatter 3 years, 8 months ago

Holy Moly SIMONS that's about 138,000 KRUGERANDS!

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Christine Anderson 3 years, 8 months ago

Hmmmm...I say we all find out Knology's email and start letting them know that if the quality of customer service goes down, the prices go up, and most importantly, if they take away the jobs of the very hard-working people they already have at Sunflower, those of us dissatisfied will bolt for other providers. Then see just how successful the merger is.

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kristyj 3 years, 8 months ago

but whatever shall happen to Broadband Man?

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EJ Mulligan 3 years, 8 months ago

This surely is not the PR that Knology wants today. Not even a quote from a human being with the company? Image is as important as dollars, especially in a situation like this. Not a good first impression here...

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hawkman8950 3 years, 8 months ago

guess i'll go old school and listen to radio from here on out

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Christine Anderson 3 years, 8 months ago

Okay, you turdwads. What we needed to know is: 1) How much of a rate hike will we be treated to? 2)Are you going to call all Sunflowers' customer service reps in and tell them they are fired because the "new boss" has arrived?

Stink, stank, stunk!

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uncleandyt 3 years, 8 months ago

acquisition opportunities shall bridge the footprints I hope Knology isn't wearing clown shoes.

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Ryan Wood 3 years, 8 months ago

$22 million EBITDA?! And World Company employees are taking pay cuts?

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Keith 3 years, 8 months ago

"Synergies are expected to be approximately $5 million."

Some of those synergies will be looking for work in the Lawrence area.

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3 years, 8 months ago

Hopefully my cable signal will get better......probably get worse, great.

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vuduchyld 3 years, 8 months ago

Wow...EBITDA is basically 40% of revenues? Impressive.

Impressive enough for somebody to pay 8x EBITDA, anyway!

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whynaut 3 years, 8 months ago

So what happens to the World Company after it sells off it's cash cow?

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Kontum1972 3 years, 8 months ago

hopefully the buyout is all in one's....looks more impressive..LoL!

how many aromored cars will it take to haul all this dough?

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wdl 3 years, 8 months ago

I am not to well read when it comes to business speak. Would someone break down the third paragraph in this news release and explain in English what it means.

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Paul R Getto 3 years, 8 months ago

Except that Dolph and the rest of the clan won't have to worry about having to eat beans and pasta in their golden years.

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rbs 3 years, 8 months ago

So basically, this says nothing. . .

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