WOW! Internet, Cable & Phone says it plans to acquire Knology in an all-cash transaction that translates into $19.75 per outstanding share. When the deal is done, Knology will become a WOW! subsidiary.

According to WOW!, the share price represents a premium of approximately 34 percent compared with Knology’s average closing share price “during the three-month period prior to media reports on Knology’s sales process.” The entire deal is valued at approximately $1.5 billion. The agreement now will undergo all the usual board votes and regulatory approvals.

Knology provides of interactive communications and entertainment services in 10 markets in the southeastern United States and three markets in the Midwest. WOW! operates in Michigan, Illinois, Ohio and Indiana. The combined entity will serve more than 800,000 customers, and its products and services will be available to more than 2.8 million households in 13 states.

Noted Colleen Abdoulah, WOW! CEO and chairman, in a statement earlier this morning, “Our two companies have much in common. We share similar beliefs in how employees and customers should be treated, and we both know how to succeed in competitive environments. WOW! and Knology are a natural fit; together, our people, network and operating infrastructure will combine to provide a strong platform for continued growth.” 

Added Knology CEO and Chairman Rodger Johnson, “Since its founding in 1995, Knology has been a leader in the communities we serve. We are proud of our team’s accomplishments over the years, from our company-wide focus on serving our residential and commercial customers to the creation of significant shareholder value. We look forward to working with WOW! to build an even stronger business.”

Credit Suisse, Morgan Stanley, RBC Capital Markets, SunTrust Robinson Humphrey and Bank of Tokyo-Mitsubishi UFJ have provided fully committed debt financing in connection with the transaction.

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