Comcast buys Patriot for $483 M

By SiliconIndia   |   Wednesday, 11 April 2007, 07:00 Hrs
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In what could be the biggest deal in biggest in cable history yet, Comcast, America's leading provider of cable services and communications company has agreed to buy Patriot Media and Communications for $483 million or about $6,000 per subscriber. The latter has about 81,000 subscribers in 31 communities in Central New Jersey, including Princeton, Chatham and Mendham. The deal was sealed after nearly eight months of negotiations.

Patriot is growing to more than $615 in annual cash flow per customer in 2007 as compared to Comcast that generates about $450 per subscriber per year. According to Sanford Bernstein cable analyst Craig Moffett, Patriot exceeds Comcast in several key metrics. Last year, its basic-video penetration rate was 68 percent of homes passed (versus Comcast's 51 percent); high-speed Internet penetration was 41 percent of homes passed (compared to 25 percent at Comcast) and cash-flow margins (cash flow as a percentage of revenue) at Patriot were 46 percent (compared to 41 percent at Comcast).

"Patriot Media systems are fully upgraded, have superior demographics, strong penetration of advanced products and best of all, they geographically complement our systems in New Jersey," said Steve Burke, Comcast chief operating officer. "We are delighted at the prospect of adding these new customers to Comcast in the near future and look forward to providing them with our advanced products and services."

The deal comes just one day after Comcast agreed to unwind its Insight Midwest partnership on April 2nd with Insight Communications, gaining 684,000 subscribers in Illinois and Indiana. Apart from participating in last year's $17.6 billion purchase of Adelphia Communications with Time Warner Inc. � where it received about one million additional subscribers � Comcast has done a few small tuck-in acquisitions over the past few years to fill out its existing footprint.

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