Feb 2, 2011 : Time Warner Cable to Acquire NaviSite
📅 - Company strategically grows its commercial services customer base and product portfolio with addition of enterprise-class managed services and cloud computing solutions.
Time Warner Cable Inc., a provider of advanced digital products and services and NaviSite, Inc., a provider of cloud-enabled enterprise hosting and application services, yesterday announced that they have entered into an agreement under which the company will acquire NaviSite for $5.50 per share in cash, or a total equity value of approximately $230 million.
According to it, the acquisition provides Time Warner Cable Business Class, the company's commercial services business, an immediate presence in the managed services market with NaviSite's more than 1,200 customers. Following the completion of the acquisition, it plans to continue the exceptional service of NaviSite's Enterprise customers and to use NaviSite's operational expertise and enterprise-class infrastructure to meet the rapidly growing demand for managed services offerings from the company's existing and future small and medium-sized business customers.
The company states that the transaction represents a 33% premium to NaviSite's Tuesday's closing price. The transaction also represents an attractive value to it. The acquisition is expected to be accretive to its EPS and Free Cash Flow and will not have a material impact on leverage ratios. The company expects to utilize NaviSite's net operating losses, which it believes will yield a net present value of approximately $40 million in tax savings after closing. The transaction is expected to close in the second calendar quarter of 2011 and is subject to NaviSite stockholder approval, expiration or early termination of the Hart-Scott-Rodino antitrust waiting period and other customary closing conditions. It says that NaviSite employs approximately 570 people worldwide. It operates ten data centers in the United States and the United Kingdom, including two SAS 70 Type II certified data centers, and network operations centers in Gurgaon, India and Andover, Massachusetts.
The company avers that Deutsche Bank Securities Inc. and Paul, Weiss, Rifkind, Wharton & Garrison, LLP acted as its advisors. BRL Law Group LLC acted as advisor for NaviSite, and Raymond James and Richards, Layton & Finger, P.A. acted as advisors for NaviSite's Special Committee of its Board of Directors.
"Our commercial services business is a key growth driver for the company and one in which we continue to see great opportunity," said Glenn Britt, Chairman and CEO of Time Warner Cable. "NaviSite provides us with a successful managed services business and a new, innovative managed cloud platform representing significant new growth opportunities. We expect to build upon NaviSite's successful enterprise-class offerings, and their operational capabilities, infrastructure and expertise to more rapidly create a robust managed services offering for small and medium sized businesses. This transaction is consistent with our capital allocation strategy - selectively investing in our business to accelerate growth while continuing to return capital to shareholders."
"On behalf of all the employees of NaviSite, we are delighted to join the Time Warner Cable family," said R. Brooks Borcherding, President and CEO of NaviSite. "Our valued customers can rest assured knowing that NaviSite and Time Warner Cable are committed to helping them grow their businesses and to delivering the reliability, innovation, and customer service they have come to expect. We also look forward to powering Time Warner Cable's development of innovative managed and cloud services for its commercial customers."
Time Warner Cable Inc., a provider of advanced digital products and services and NaviSite, Inc., a provider of cloud-enabled enterprise hosting and application services, yesterday announced that they have entered into an agreement under which the company will acquire NaviSite for $5.50 per share in cash, or a total equity value of approximately $230 million.
According to it, the acquisition provides Time Warner Cable Business Class, the company's commercial services business, an immediate presence in the managed services market with NaviSite's more than 1,200 customers. Following the completion of the acquisition, it plans to continue the exceptional service of NaviSite's Enterprise customers and to use NaviSite's operational expertise and enterprise-class infrastructure to meet the rapidly growing demand for managed services offerings from the company's existing and future small and medium-sized business customers.
The company states that the transaction represents a 33% premium to NaviSite's Tuesday's closing price. The transaction also represents an attractive value to it. The acquisition is expected to be accretive to its EPS and Free Cash Flow and will not have a material impact on leverage ratios. The company expects to utilize NaviSite's net operating losses, which it believes will yield a net present value of approximately $40 million in tax savings after closing. The transaction is expected to close in the second calendar quarter of 2011 and is subject to NaviSite stockholder approval, expiration or early termination of the Hart-Scott-Rodino antitrust waiting period and other customary closing conditions. It says that NaviSite employs approximately 570 people worldwide. It operates ten data centers in the United States and the United Kingdom, including two SAS 70 Type II certified data centers, and network operations centers in Gurgaon, India and Andover, Massachusetts.
The company avers that Deutsche Bank Securities Inc. and Paul, Weiss, Rifkind, Wharton & Garrison, LLP acted as its advisors. BRL Law Group LLC acted as advisor for NaviSite, and Raymond James and Richards, Layton & Finger, P.A. acted as advisors for NaviSite's Special Committee of its Board of Directors.
"Our commercial services business is a key growth driver for the company and one in which we continue to see great opportunity," said Glenn Britt, Chairman and CEO of Time Warner Cable. "NaviSite provides us with a successful managed services business and a new, innovative managed cloud platform representing significant new growth opportunities. We expect to build upon NaviSite's successful enterprise-class offerings, and their operational capabilities, infrastructure and expertise to more rapidly create a robust managed services offering for small and medium sized businesses. This transaction is consistent with our capital allocation strategy - selectively investing in our business to accelerate growth while continuing to return capital to shareholders."
"On behalf of all the employees of NaviSite, we are delighted to join the Time Warner Cable family," said R. Brooks Borcherding, President and CEO of NaviSite. "Our valued customers can rest assured knowing that NaviSite and Time Warner Cable are committed to helping them grow their businesses and to delivering the reliability, innovation, and customer service they have come to expect. We also look forward to powering Time Warner Cable's development of innovative managed and cloud services for its commercial customers."
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