The sale of regional cable operator Knology Inc. is complete.
WOW! Internet, Cable & Phone, whose controlling shareholder is Avista Capital Partners, acquired Knology Inc. by merger Tuesday. First announced in April, WOW acquired Knology for $19.75 per share in cash. The all-cash transaction is valued at about $1.5 billion, which included all assets and liabilities.
Knology filed to have its stock removed from Nasdaq effective immediately.
“Between the two of us, we are now the ninth-largest cable operator in the country. We have 800,000 customers in 13 states,” said Abu Khan, the former general manager of Knology in Augusta and now vice president and general manager of WOW in Augusta. “WOW wanted to get a little bit larger. Knology made a lot of sense in terms of their strategy. It was good for WOW in terms of their expansion, and it was good for Knology shareholders.”
The transaction was approved by Knology shareholders during a special meeting June 26. Credit Suisse, Morgan Stanley, RBC Capital Markets, SunTrust Robinson Humphrey and Bank of Tokyo-Mitsubishi UFJ committed debt financing for the deal.
WOW, a provider of residential and commercial high-speed Internet, cable television and phone services, operates in Michigan, Illinois, Ohio and Indiana. Its customer base now includes Knology’s service area of the southwestern and Midwestern United States.
It will take some time for Knology to start operating solely under the WOW name, Khan said.
“We’ll continue to have our vans, logos and shirts as Knology for at least the short term as we get through all of the changes,” he said.
Throughout the company, the majority of Knology employees will not experience any changes in their positions. Knology has 90 employees and 300 call center representatives in Augusta, Khan said.
“There will be some employees that we’ll look at in terms of duplicating positions. For instance, we certainly don’t need two CEOs. We’re going to maintain a real open and honest communication with all of our employees,” he said. “But here, in terms of our field folks and customer service folks, we’re still going to need those guys. We don’t foresee any changes there.”
Colleen Abdoulah, WOW’s CEO, will continue in her role. Todd Holt, the former chief financial officer and president of Knology, was named WOW’s chief financial officer.