Scripps Networks Interactive, Inc. (SNI) announced that it will enter into a joint venture with Cox Communications Inc. (COX) by which it will acquire a controlling interest in the Travel Channel. This transaction is structured as a leveraged joint venture between the companies.
Scripps Networks noted that upon completion of the transaction, it will own 65% of the Travel Channel and Cox Communications retaining a 35% minority stake in the cable television network.
Travel Channel, which was launched in 1987, now reaches about 95 million U.S. television households, according to the statement by Scripps Networks.
Cox Communications to contribute the Travel Channel, valued at $975 million, and Scripps Networks to 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.
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