I'm sure many readers have seen the news today that Insight and Time Warner Cable have reached an agreement for Time Warner Cable to acquire Insight. I tell you this with deeply mixed emotions -- I am as proud as I can be at the fabulous company we have built and I will miss leading it when we conclude this transaction early next year. On the other hand, I think it is time for us to hand this great company over to another great company with deep resources and experience in our industry. Time Warner Cable is committed to our region -- they are the second largest
operator in Kentucky and the largest in Ohio -- and they are among the most highly respected technology companies in the world.
I'm sure you have many questions about the coming transition if you are one of our customers. First of all, Insight customers don't need to do anything as a result of this announcement. This transition will occur over a period of months and we will be communicating to all customers about the transition to ensure it is seamless.
In the meantime, I've included a copy of the press release announcing our agreement with Time Warner Cable.
NEW YORK, NY, August 15, 2011 – Time Warner Cable Inc. (NYSE: TWC) and Insight Communications Company, Inc. today announced they have entered into a definitive merger agreement under which Time Warner Cable will acquire Insight for $3 billion in cash. Insight serves more than 750,000 customers in Indiana, Kentucky and Ohio.
“We believe in our business and its long-term prospects and have long thought that Insight’s well-run, technologically advanced systems would fit well with our Midwest operations. With the deal announced today, we are able to acquire those systems at an attractive price that is consistent with both our disciplined approach to M&A and our capital allocation strategy,” said Glenn Britt, Chairman and CEO of Time Warner Cable. “We look forward to serving these customers, welcoming Insight employees to the Time Warner Cable team and building on Insight’s successes.”
"For more than 25 years, Insight has provided our customers with unparalleled service and an unwavering commitment to excellence," said Michael Willner, co-founder, Vice Chairman and CEO of Insight Communications. “We are extremely proud of the investment we’ve made to transform our cable systems into one of the leading telecommunications platforms in the nation. Given their industry-leading position and depth of resources, we expect that Time Warner Cable will continue building on the advancements our tremendous employees have made while providing outstanding service to our customers. The communities we serve could not be in better hands than with Time Warner Cable which already operates in this region and is widely regarded as one of the most respected technology companies in the world."
“Taking into account Insight’s recent performance, $300 million in NOL value, the anticipated net cost synergies and lower capital intensity, this acquisition presents an attractive opportunity to enhance TWC shareholder value. With these benefits, the purchase price multiple is favorable to current TWC and peer average trading multiples,” said Irene Esteves, CFO of Time Warner Cable. “We will continue to return excess capital to shareholders consistent with our target leverage ratio of 3.25x, including the impact of this acquisition on our existing and expected leverage.” Insight, serving approximately 537,000 high-speed data subscribers, 679,000 video subscribers and 297,000 voice subscribers, has invested in substantial infrastructure improvements. These system improvements include digital conversions and DOCSIS 3.0 deployment.
Time Warner Cable believes that, after incurring onetime costs and capital expenditures, it will create annual cost efficiencies of approximately $100 million through programming expense savings and other cost reductions. The company expects to realize the bulk of the savings within two years of closing. Furthermore, with Insight’s digital conversion and DOCSIS 3.0 rollout behind it, Time Warner Cable expects Insight will have lower capital requirements of 10%-12% of revenues upon completion of the acquisition.
Insight is currently owned by The Carlyle Group, Crestview Partners, MidOcean Partners, members of Insight management and others. Carlyle and Insight management took the company private in December 2005, and Crestview and MidOcean purchased a significant stake in the company in April 2010.
This transaction is subject to expiration or early termination of the Hart-Scott-Rodino antitrust waiting period, receipt of FCC and franchise approvals, and other customary closing conditions. Time Warner Cable and Insight will work together to provide a smooth transition for both customers and employees.
BofA Merrill Lynch and UBS Investment Bank acted as financial advisors and Dow Lohnes PLLC acted as legal advisor to Insight on this transaction. Citigroup Global Markets Inc. acted as exclusive financial advisor and Paul, Weiss, Rifkind, Wharton & Garrison LLP and Edwards Angell Palmer and Dodge LLP acted as legal advisors to Time Warner Cable on this transaction.
About Time Warner Cable Time Warner Cable Inc. (NYSE: TWC) is among the largest providers of video, high-speed data and voice services in the United States, connecting more than 14 million customers to entertainment, information and each other. Time Warner Cable Business Class offers data, video, and voice services to businesses of all sizes, cell tower backhaul services to wireless carriers and, through its NaviSite subsidiary, enterprise-class hosting, managed application, messaging and cloud services. Time Warner Cable Media, the advertising arm of Time Warner Cable, offers national, regional and local companies innovative advertising solutions. More information about the services of Time Warner Cable is available at www.timewarnercable.com, www.twcbc.com, www.navisite.com, and www.twcmedia.com.
About Insight Communications Insight Communications is the ninth largest cable operator in the United States with approximately 759,400 customer relationships in the three contiguous states of Kentucky, Indiana and Ohio. Insight offers bundled, state-of-the-art video, high-speed Internet and voice telephony services to residential and business customers and delivers cn|2, a new kind of news and information network, to all of its Kentucky and Indiana customers.
About The Carlyle Group The Carlyle Group is a global alternative asset manager with approximately $153 billion of assets under management across 89 funds and 49 fund of fund vehicles. Carlyle invests across four segments – Corporate Private Equity, Real Assets, Global Market Strategies and Fund of Funds Solutions – in Africa, Asia, Australia, Europe, the Middle East, North America and South America focusing on aerospace, defense, & government services, consumer & retail, energy, financial services, healthcare, industrial, technology & business services, telecommunications & media and transportation. The Carlyle Group employs more than 1,100 people in 35 offices across six continents. Web: www.carlyle.com; Case Studies: www.carlylegroupcreatesvalue.com; Video: www.youtube.com/OneCarlyle.
About Crestview Partners Founded in 2004, Crestview Partners is a value-oriented private equity firm based in New York with approximately $4 billion of capital under management. The firm focuses on the media, financial services, healthcare and energy sectors. Crestview is led by a group of former partners and leaders in the private equity and media business and former senior management of Goldman Sachs and Morgan Stanley. For more information, visit www.crestview.com.
About MidOcean Partners MidOcean Partners is a premier private equity firm headquartered in New York focused on the middle market. MidOcean is committed to investing in high quality companies with stable market positions and multiple opportunities for growth. Targeted sectors include media and communications, consumer, business and financial services and industrial services. MidOcean utilizes a broad foundation of expertise in its focus industries to create value for its investors and partners. For more information, visit www.midoceanpartners.com.
Caution Concerning Forward-Looking Statements This document includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, the anticipated timing to close this transaction and expected synergies and are based on current expectations or beliefs, and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements herein due to changes in economic, business, competitive, technological, strategic and/or regulatory factors, and other factors affecting the operations of Insight and Time Warner Cable Inc. More detailed information about these factors may be found in postings in the “Investor Relations” section of Insight’s website and in filings by Time Warner Cable Inc. with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Neither Insight nor Time Warner Cable is under any obligation to, and expressly disclaims any such obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise.
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Lance - your service is NOT typical insight. A couple years ago, I found Micheal on facebook. I sent him a message about how I loved insights service and was so happy we didn't have to deal with the same crap that comcast and time warner users dealt with (and others). I mentioned in my message how I wasn't happy about a call I got from support about leaving VNC open on my internet connection open for work purpose and for the next two weeks I got a phone call from insight support almost daily on my home's voicemail trying to help me out.
Do you think these huge conglomerates would do that? not a damn chance. RIP insight. Wish I could have worked for such a great company and I hope wherever Michael goes, they prosper well.
Posted by: Paul Cahill | Friday, September 16, 2011 at 11:20 PM
Shouldn't this have been posted under the infamous Hall of Shame section?
Posted by: D John | Saturday, August 27, 2011 at 09:36 PM
Paris, you've probably had the best for you, but for me I've had a slew of issues left and right. I think Insight's cable is overpriced compared over WOW or TimeWarner or even Direct TV or even Dish!
I'm so upset, and have had several points where customer service was just terriable. I've talked with people who have Insight, and have said the same thing. So I know im not crazy, but believe me my walk with them has been tough, and I hope this deal hurry up and goes through, so I can have Time Warner ASAP!
Posted by: lance | Friday, August 26, 2011 at 01:04 AM
Lance,
Insight in Columbus is a Time Warner Cable reseller. They're using TWC satellite equipment, broadband headend gear, and possibly even TWC customer care associates. (Although I'm not sure on that last one, I may be wrong.) In areas where Insight runs the show itself, Insight is AMAZING. The NKY folks are awesome, always prompt, professional and even in a disaster kept the services running. I miss having their service. Michael has helped me several times with escalated issues that couldn't be dealt with at the office level. I was a proud Insight customer, and I just hope that Time Warner will let the customer first spirit live on.
Hi, I'm Paris, and that's my Insight.
Posted by: Paris Miller | Tuesday, August 23, 2011 at 11:09 PM
This is the happiest news for me! I'm sorry Insight is far worst cable outlet here in Columbus area. I've had WOW and never had a problem but having Insight was no picnic. Customer Services was bad, price and billing was overpriced and had many issues with my services. Everybody I knew had issues with this company and nobody ever took action. I wished Comcast would have bought them out, but Time Warner owns 60% of the audience in Columbus area. I wished WOW was in my area, but Insight and WOW fight tooth and nail, and I wasn't moving due to the cable outlets. I rather have direct tv over cable, but cable continues to go up and nobody at the top gives a damn! For me I welcome Time Warner buy-out! This is music to my ears. Insight sucked plain and simple and couldn't have happened to a crappy company!
Posted by: lance | Monday, August 22, 2011 at 02:58 PM
...and I just got my Ceton InfiniTV 4 less than a month ago to get rid of the crappy DVR and save $10/month. Looks like I just flushed $300 down the toilet b/c I will NOT be going back with TWC (my wife and I had them when we lived in Richmond, and they were HORRIBLE).
Oh how I wish Lexington had either U-Verse or FIOS.
Posted by: JP | Monday, August 22, 2011 at 02:10 PM
Have been mulling this announcement over for days now. It will not be a good thing when it comes to customer service, I know. There may be higher end tech via TWC, but I care only about the Internet feed - and Insight has been astonishingly great on this end. Can't see any improvement. Economies of scale for the stockholders: not the subscribers.
Hope that you keep blogging, Michael - it has been great reading your Insights! And I hope that you are on the TWC board.
Posted by: CVG | Monday, August 22, 2011 at 09:31 AM
I am honestly sad to see Insight dissolve into TimeWarner. Smaller companies (in my opinion) are always better than the mega companies, especially when it comes to customer service, rates, and their willingness to work with you to get issues (including billing) resolved.
While Insight is no longer in my area (Central Indiana), it was the best cable company that I had ever dealt with. When I went through a financial meltdown, Insight worked with me to make sure my services with them were not turned off, and whenever I had a service problem, they were quick to get it fixed. Under Comcast, they NEVER fix their problems, and all I see are rate hikes, bandwidth caps, and a multitude of other problems. The only way to keep your rates low with Comcast is to own ALL of your own equipment (but if it breaks, Comcast won't lift a finger to help), and to bludgen them over the head with a constant threat to go to U-Verse or satellite.
When I lived in Cincinnati, I never had a problem with TimeWarner. Back in the day, they gave me a cable box and modem (with no rent charges). The catch was, it was theirs, and I was not allowed to use my own equipment. The flip side to that was that they were instantly aware of a problem with the gear at my house, and often had a tech at my house to fix/replace faulty equipment before I knew there was ever a problem. Today (at least at my mother-in-law's house in Cincinnati), they do charge rent for their gear, but they are still instantly aware of any problems or issues that their gear is having. Perhaps it is just the Cincinnati market, but if I was to be forced to choose between Comcast and TimeWarner, I would go with TimeWarner in an instant.
Michael, I wish that Insight would reverse this decision. Competition is always a good thing, as it keeps innovation moving forward, keeps prices low(er), and forces companies to stay honest. With Insight gone, TimeWarner just grows bigger and more deaf to their customers.
Posted by: Mark | Tuesday, August 16, 2011 at 08:41 AM
I for one have mixed emotions on this as well. i've been an insight customer for many years never been a time warner customer but i have worked for both companies working for insight was a blast had alot of fun. 1 in 10 customers i talked to didn't like insight for one reason or another. then i worked for Time Warner they paid better, but 4 out of 10 customers you talked to HATED them. which made it very difficult to work there. as a insight customer i call up insight and say i have a problem with my service internet isn't going as fast as it should couple channels aren't working what ever the case they try to fix it on the first call and if they can't then i have a tech coming out within the next few days to fix the problem if its an outage they disbatch a team THAT NIGHT and its fixed before you wake up the next day. when i was working for time warner people would tell me they had a problem years ago and thats why they left i say with confidence that the problem was fixed (thinking to my self) "its been years surely they have it fixed" i sell that person to only get a call from that person 1 day- 2 weeks later yelling at me that they are still having the same problem they had YEARS ago as a insight customer and ex employee i know insight took care of their lines and we should have no problems for a few years but i know when the lines fail or something goes wrong time warner will do a quick fix that will be nothing but problems from then on out and for a programming note some time warner markets have NFL network cincinnati and most of ohio do not lets hope we get the best of both worlds and get all the channels they have plus all the channels we currently have and put them together i dought it but its a hope and if time warner takes away channels like hd-net hd-net movies and NFL network then i guess i'll have to go to another company cincy bell fios is right up the road from me and they will be coming to my house within the next few months to a year that way i will have choices on my internet at least i currently have 50.0
Posted by: Thomas | Tuesday, August 16, 2011 at 06:56 AM
I too will be cancelling my service the day Time Warner takes over. Way to screw over your customers Michael by sticking us with this company and its horrible track record.
Posted by: Jeff | Tuesday, August 16, 2011 at 01:11 AM
Time Warner is the worst cable company I have ever had. Very disappointed that Insight would sell out but they dont care they have their money and now we will get screwed by bad service and high rates. I will be canceling my service very soon.
Posted by: Alex | Tuesday, August 16, 2011 at 12:19 AM
im mint whole wourld sorry
Posted by: rick | Monday, August 15, 2011 at 10:01 PM
michale u need to change your mind like really fast .everybody is going to cancel there service and go to another company do u really want that .timewarner is not only the biggest company its the worst in the whole world havent u read up on time warner they have a bad background from employees to customers .Read please before u go any futher with this
Posted by: rick | Monday, August 15, 2011 at 10:00 PM
im really upset that u would do somthing so stupid
Posted by: rick | Monday, August 15, 2011 at 09:55 PM
Wow, Insight may have been overpriced but the internet service was top notch and I never had to worry about caps or any thing like that. Sure can't wait to cancel my tv and internet services the day of the official transition. Thanks a bunch for taking care of a long term paying customer Insight!
Posted by: Ray | Monday, August 15, 2011 at 08:24 PM
I loved insight. Not happy about this either.
Posted by: Paul Cahill | Monday, August 15, 2011 at 08:06 PM
@Onry-
Ok, let's suppose that each "partener" gets 1Billion.
Still even if he got 1/2 a billion or whatever. He could still watch his money mature, sit on a boat, and go fishing while his money just grows.
Posted by: David | Monday, August 15, 2011 at 06:45 PM
sad, sad day. To TWC of all companies. I am seriously considering cancelling service at this point.
Posted by: dissapointed | Monday, August 15, 2011 at 05:51 PM
Yay
Posted by: Marissa Lipton | Monday, August 15, 2011 at 04:44 PM
LOL - I laugh every time I see TMobile commercials advertising unlimited data, knowing that they want to sell to Capped (And throttled!) AT&T... now I can laugh when I see those Insight commercials toting how much they care as they sell to terrible TWC. We petitioned Insight and now I can do my homework! Give me a break. TWC is always does "well" in Consumerist's Worst Company Tournament... for a reason.
Their customer service is bad and their content almost worse. They still don't have NFL Network, took years to get ESPNU and Big Ten Network and still don't have HBOGO. It's like TWC feels they're not getting the best rate possible unless they are the last provider to get something....
Onry, TWC doesn't have caps (Though they reserve the right to in their vague agreement). They tested a 40gb cap a few years ago (Yes, you read that correctly)... and it was a terrible failure and they folded after the backlash.
Here's to hoping Cinbell or Verizon Fios will hit my market before TWC really gets in control...
Posted by: nate | Monday, August 15, 2011 at 04:28 PM
I am not thrilled by the news but it is the way of the world now, the big swallowing up the small.
As for caps, Time Warner doesn't currently have any caps on broadband usage
Posted by: Paul Templeton | Monday, August 15, 2011 at 04:21 PM
He doesn't live in Louisville or Lexington to post #1 and to post #2 he is not getting 3 billion. Insight is a privately held company, owned, currently by 3 partners. However, we can all look forward to Broadband caps.
Posted by: Onry | Monday, August 15, 2011 at 04:12 PM
with the 3billion he is getting he will be able to basically sit back and let his money mature in funds that pay dividends.
After all why put up with customers, when money never sleeps, and doesn't complain!
Posted by: David | Monday, August 15, 2011 at 04:05 PM
Very disappointed Mike, I am very disappointed in this. I loved Insight, they had great customer service. They had great offerings. They had great rates. Everything was great, hell I even applied to work for Insight (not then anyone called me back for an interview). It wasn't Verizon Fios or something, but it was enough for my needs.
Now we shift to Time Warner, who has horrible customer service, horrible offerings, horrible rates.
Fine Michael, take your $3,000,000 and run. Here's hoping you live in Lexington or Louisville, as your neighbors should let you know how they feel
Posted by: Phillip Geurtz | Monday, August 15, 2011 at 03:58 PM