There haven’t been too many media deals recently, so today’s announcement is exciting. Scripps Networks Interactive Inc., which currently owns the lifestyle cable channels Food Network and HGTV, announced today that it has entered into a joint venture with Cox Communications that will result in Scripps owning a controlling interest in the Travel Channel — valued at $975 million.
The transaction, which is expected to close in January, will leave Cox with a 35 percent stake in the Travel Channel, while Scipps will own 65 percent. Scripps is paying $181 million in cash and the partnership between Scripps and Cox will take on $878 million in third-party debt, the companies said.
“Adding the Travel Channel, and its related enterprises, provides us with a unique opportunity to meaningfully expand our portfolio into a lifestyle category that’s highly desirable to media consumers, advertisers and programming distributors,” said Scripps CEO Kenneth Lowe, in a statement on the deal. “Our vision for Travel follows the same script that’s made Food Network and HGTV two of the most powerful brands in all of television. By lending our unparalleled expertise in developing successful lifestyle media businesses, we have every confidence that we can build on Travel’s strong brand identity and leverage the successes achieved to date by the top-notch team at Travel Channel and our new partners at Cox Communications.”
Full release after the jump
Scripps Networks Interactive to Acquire Controlling Interest in Travel Channel
Scripps Will Control 65 Percent of Leveraged Joint Venture with Cox Communications
CINCINNATI–(BUSINESS WIRE)–Scripps Networks Interactive Inc. (NYSE: SNI – News), owner and operator of the Food Network and HGTV lifestyle television networks, will enter into a joint venture with Cox Communications Inc. by which it will acquire a controlling interest in the Travel Channel.
The two companies today signed a definitive agreement that, upon completion, will result in Scripps Networks Interactive owning 65 percent of the Travel Channel and Cox Communications retaining a 35 percent minority stake in the network.
The Travel Channel transaction is expected to be completed by or before January 2010.
“Combining the Travel Channel with Food Network and HGTV will make our fast-growing, young company the undisputed global leader in lifestyle programming,” said Kenneth W. Lowe, chairman, president and chief executive officer of Scripps Networks Interactive. “This collection of popular lifestyle networks will be in great demand worldwide and promises to create substantial long-term value for all of our stakeholders.”
Launched in 1987, Travel Channel has grown to become one of America’s best known cable television networks and today reaches about 95 million U.S. television households. The television network â€“ the cornerstone of Travel Channel Media — supports a growing range of cross-platform initiatives including Internet, mobile and social media applications.
“Adding the Travel Channel, and its related enterprises, provides us with a unique opportunity to meaningfully expand our portfolio into a lifestyle category thatâ€™s highly desirable to media consumers, advertisers and programming distributors,” Lowe said. “Our vision for Travel follows the same script that’s made Food Network and HGTV two of the most powerful brands in all of television. By lending our unparalleled expertise in developing successful lifestyle media businesses, we have every confidence that we can build on Travelâ€™s strong brand identity and leverage the successes achieved to date by the top-notch team at Travel Channel and our new partners at Cox Communications.”
As proposed, the transaction is structured as a leveraged joint venture between Scripps Networks Interactive and Cox Communications.
Cox will contribute the Travel Channel, valued at $975 million, and Scripps Networks Interactive will contribute $181 million in cash to a newly created partnership. The partnership, in turn, will take on $878 million in third-party debt that will be guaranteed by Scripps and indemnified by Cox, with the proceeds to be distributed to Cox.
The transaction will result in the partnership having about $696 million in net debt.
“This solid partnership that we’re establishing today allows us to maintain an interest in Travel Channel while at the same time giving the network an opportunity to leverage the resources and expertise of a successful programmer like Scripps Networks Interactive,” said Cox Communications President Patrick Esser. “Scripps has an outstanding reputation as a company, an employer and a programmer. Over the past 15 years, Scripps Networks Interactive has built a portfolio of leading lifestyle programming brands, and we think this complementary expertise will be a boon to Travel Channel’s future growth.”
Scripps Networks Interactive will control the joint venture and the network will be run as part of the companyâ€™s growing portfolio of popular lifestyle media brands.
“The incredibly complementary nature of our lifestyle media businesses presents an abundance of opportunity to provide services for Travel Channel that will result in increased advertising and affiliate revenues and substantial cost synergies,” Lowe said. “We have extensive experience working with partners to build value over the long term. Among cable companies, Cox has an outstanding reputation for its vision and investment for the long-term success of its businesses. We look forward to partnering with them in this venture.”