Time Warner Cable has signed a definitive agreement with Duke Energy Corporation and investment funds managed by Alinda Capital Partners to buy DukeNet Communications for a cash consideration of $600m to expand its fibre footprint.
With a fibre optic network of more than 8,700 miles, DukeNet provides data and bandwidth services in North Carolina, South Carolina, and five other states in the Southeast US.
Duke Energy Corporation and the Alinda investment funds own a 50 per cent stake each in DukeNet.
Phil Meeks, executive vice president and COO of business services for Time Warner Cable, said: “Business Services is a key growth area for Time Warner Cable and this acquisition will greatly enhance our already growing fibre network to better serve customers, particularly those in key markets in the Carolinas.
“This acquisition will help us expand our fibre footprint at a price that is consistent with our disciplined approach to M&A, accounting for expected synergies and tax benefits.”
Marc Manly, president of commercial business group at Duke Energy, said: “The sale completes Duke Energy’s transition out of DukeNet, which although a growing operation, is a non-core business to our company.”
RBC Capital Markets advised Duke Energy and Alinda on the sale, while Moore & Van Allen provided legal counsel.
Edwards Wildman Palmer provided legal counsel to Time Warner Cable.
Duke Energy’s regulated utility operations serve about 7.2 million electric customers in six US states, while its commercial power and international business segments own and operate diverse power generation assets in North America and Latin America.
The transaction, which is subject to regulatory approvals, is expected to close in the first quarter of 2014.