Time Warner Cable Inc., the second-largest U.S. cable company, agreed to buy fiber-optic network provider DukeNet Communications LLC for $600 million in cash, bolstering its business services in the Southeast.
Time Warner Cable is acquiring the business from Duke Energy Corp. and investment funds managed by Alinda Capital Partners, according to a statement today. The deal, which includes the repayment of debt, is expected to close in the first quarter of 2014, assuming it passes regulatory hurdles.
DukeNet, based in Charlotte, North Carolina, operates an 8,700-mile (14,000-kilometer) fiber-optic network for wireless carriers, data centers, government customers and corporate clients. Time Warner Cable plans to use DukeNet to expand its business services in seven Southeastern states, including North and South Carolina.
“Business services is a key growth area for Time Warner Cable and this acquisition will greatly enhance our already growing fiber network to better serve customers, particularly those in key markets in the Carolinas,” Phil Meeks, chief operating officer of business services for the New York-based cable company, said in the statement.
Time Warner Cable received legal counsel from Edwards Wildman Palmer LLP on the deal. RBC Capital Markets LLC served as a financial adviser to Duke Energy and Alinda, while Moore & Van Allen PLLC provided legal counsel.
The acquisition follows Time Warner Cable’s $230 million purchase of NaviSite Inc., a 2011 deal that also brought it more business customers.
Time Warner Cable shares dropped 1.6 percent to $111.02 in New York. Duke Energy was little changed, closing at $66.34.