Charter buys Bright House in $10.4bn deal
April 1, 2015
In a move that will see it become the second largest cable operator in the US as the consolidation of the broadband cable sector continues, Charter Communications and Advance/Newhouse Partnership (the parent company of Bright House Networks) have agreed a deal that will see Charter acquire Bright House Networks for $10.4 billion. Bright House is the sixth largest cable operator in the United States, and serves approximately 2 million video customers in central Florida including Orlando and Tampa Bay, as well as Alabama, Indiana, Michigan, and California.
The business will be conducted through a partnership of which Charter will own 73.7 per cent, and of which Advance/Newhouse will own 26.3 per cent. The consideration to be paid to Advance/Newhouse by New Charter will include common and convertible preferred units in the Partnership, in addition to $2 billion in cash. The partnership units owned by Advance/Newhouse will be exchangeable for common shares of New Charter. The deal is subject to several conditions, including Charter shareholder approval, the expiration of Time Warner Cable’s right of first offer for Bright House, the close of Charter’s previously-announced transactions with Comcast and regulatory approval.
Tom Rutledge, President and CEO of Charter Communications said: “Bright House Networks provides Charter with important operating, financial and tax benefits, as well as strategic flexibility. Bright House has built outstanding cable systems in attractive markets that are either complete, or contiguous with the New Charter footprint. This acquisition enhances our scale, and solidifies New Charter as the second largest cable operator in the US. I look forward to working with the Bright House team, whom we have known for years, in delivering great products and services to grow our market share.”
Steven Miron, Chief Executive Officer of Bright House Networks said: “We are excited about our transaction with Charter. At Bright House Networks, we are very proud of what we have achieved – from the quality of our infrastructure to the level of service our employees provide to customers every day. We share the same vision for the future of our business as Tom and the Charter leadership team, which is to gain market share by offering customers competitive products and excellent service at a tremendous value. Also, our family has known and worked with Tom Rutledge for more than 20 years. Tom managed cable systems that were part of our partnership with Time Warner Cable prior to the formation of Bright House Networks. We think the combination with Charter gives our employees, our customers and Advance/Newhouse the strongest prospects for the future.”