Charter Plunks Down $1.6B for Optimum West
Charter Communications Inc. has agreed to pay $1.625 billion in cash for Cablevision Systems Corp.'s Optimum West properties, which serve about 304,000 customers and pass 660,000 homes in mostly rural parts of Colorado, Utah, Wyoming, Utah and Montana.
The deal, announced Thursday, marks the second time Tom Rutledge, now the CEO of Charter, has swung a deal for those former Bresnan Communications systems. When Rutledge was the COO of Cablevision, he helped lead its $1.36 billion acquisition of Bresnan in 2010.
Charter will fund the acquisition with $1.5 billion of committed financing to its Charter Communications Operating LLC unit, plus cash on hand and its revolving credit facility. The deal is expected to close by the third quarter of 2013.
The deal comes into play about three months after Cablevision confirmed that it had received "unsolicited interest" in the former Bresnan properties. Charter has been viewed as the frontrunner to land the deal ever since.
Why this matters
The Bresnan properties may be a better operational fit for Charter. While Cablevision's has historically run closely-knit, very centralized systems in New York, Connecticut, and New Jersey, Charter's footprint is generally more rural, with systems in St. Louis, Los Angeles and Dallas-Ft. Worth among the exceptions. The deal also offers provides further proof that organic growth plus M&A are key to Rutledge's game plan at Charter, as the executive looks to make his mark at the nation's fourth-the largest incumbent cable operator. Some industry insiders believe Charter could be in line for more acquisitions this year or perhaps system swaps with operators such as Time Warner Cable Inc. (See Six Cable Deals We Might See in 2013.) For more
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