Mediacom Goes Private in $600 Million Deal

By Robert Davis
Nov 15 2010

It was announced this morning that Mediacom, the eighth largest cable provider in the US, will go private after the CEO agreed to purchase all remaining shares in the company.

Mediacom is following suit with other cable companies around the nation who have taken their fight for dominance to the private sector, hoping to calm fears that are often felt in the public trading market.

CEO Rocco Commisso agreed to purchase the remaining shares in Mediacom for $8.75 per share. This deal, valued at $600 million, will make the company completely private and do away with the public investors in the company.

Mediacom has seen narrowing losses in the past year as the need for broadband in outlying areas has increased. Operating in these outlying areas has become a golden goose for the company and they have seen profits increase five times over in the past two years.

Commisso already owns 40% of the stock in the company and has an 87% voting share. The move to go private follows suit with other cable companies in the nation. All other companies that have gone private have found 50% more profits since making the move.

The $600 million deal is seven times the estimated operating cash flow for the company in 2010. Commisso is hoping to give his company a cushion that can be fallen back on should problems arise after the company goes private. The deal is expected to close in the first half of 2011.