Insight's Willner: Deal Shows Carlyle Still Likes Cable

Insight Communications CEO Michael Willner said Carlyle Group's decision to sell about half of its stake in the cable operator brings "some really smart new money" into the company while allowing Carlyle to maintain a presence in the business.

Earlier Thursday, Insight announced that private equity investor Carlyle Group had agreed to sell a portion of its equity in Insight to an investor group led by Crestview Partners and MidOcean Partners for an undisclosed sum.

Jeffrey Marcus, who sold his Marcus Cable properties to Paul Allen for $2.8 billion in 1998, the first transaction of many cable buys for Allen, is a partner and head of the Media and Communications Group at Crestview, one of the new investors.
After the dust settles, Carlyle will end up with 42% equity in Insight -- down from about 86% in 2005 -- and Crestview and MidOcean will also have 42% of Insight's equity.
"This transaction has nothing to do with strategically where we go from here," Willner said. "What this did is give existing shareholders some partial liquidity and reaffirms the strategy in the industry with some really smart money coming into the business. From here we as a company with a board with new members will decide where we take it."
Willner said the initial investment has already closed. A second transaction, giving equal treatment to the rest of company shareholders, including current and former employees owning stock, will commence in the next few weeks.
Carlyle attempted to sell its entire interest in Insight in 2007, but called off the auction when bids came in below expectations.Willner said that this transaction shows Carlyle still likes the cable business.
"Rather than sell their stake completely, they chose a partial sell, so they can remain involved and invested here," Willner said. "It's a win-win for everybody. They made room for some new guys to come in and put new money to work and put old money out to their partners."