Knology Buys Verizon Systems - Multichannel

Knology Buys Verizon Systems

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Knology Inc., just months out of bankruptcy court, is back on the acquisition trail after announcing an agreement to purchase Verizon Media Ventures Inc.'s cable systems in Pinellas County, Fla., and Cerritos, Calif., with a combined 64,000 subscribers.

Terms were not disclosed.

Knology, which operates overbuild cable systems in five Southeastern states and has about 130,000 subscribers, is expected to close the deal by the end of the year.

The Verizon systems in Florida are overbuilds of BrightHouse Networks LLC. Verizon was the incumbent operator in Cerritos.

GLA New Ventures LLC, a St. Louis-based investment company, participated in the deal.

Last June, Verizon had agreed to sell the systems to Adelphia Communications Corp., but terminated the deal when Adelphia ran into trouble after the federal government began investigating Adelphia's accounting practices. Adelphia filed for Chapter 11 bankruptcy protection in June 2002. In September, former Adelphia chairman John Rigas, his sons — former chief financial officer Timothy and former executive vice president of operations Michael — and former chief accounting officer Michael Mulcahey were indicted on federal fraud charges.

The Rigases and Mulcahey have denied the charges against them. A trial date is scheduled for Jan. 5.

Knology president Rodger Johnson said in a statement that Knology would focus on "high-quality customer service and deliver a strong value proposition as we roll out our product offerings." The systems have about 11,000 high-speed data subscribers.

Knology filed a prepackaged Chapter 11 bankruptcy petition in U.S. Bankruptcy Court for the Northern District of Georgia in September, after a tender offer for its bonds failed. The company emerged from bankruptcy in November after it restructured about $444 million in debt.

Knology offers cable, telephone and high-speed-data service in Augusta, Columbus and West Point, Ga.; Huntsville, Lanett, Valley and Montgomery, Ala.; Panama City, Fla.; Charleston, S.C.; and Knoxville, Tenn.

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