Jefferies Reiterates Buy Rating, $18 PT On KNOL

Knology, Inc. KNOL announced the acquisition of cable and broadband operations in Fort Gordon, Georgia and Troy, Alabama, for a combined $30mm in cash (~5.5x EBITDA), Jefferies reports. “These operations are contiguous to existing operations,” Jefferies writes. “The combined Fort Gordon and Troy operations represent ~21,000 connections, $15mm annualized revenue and $5.5mm annualized EBITDA. “The acquisition will be funded with $10mm of cash on hand and $20mm from the additional Term Loan A proceeds. Management expects the transaction to be accretive on a levered free cash flow per share basis and is expected to close late 2Q11.” Jefferies said that it expects Knology to continue to expand its footprint through: i) M&A and ii) addl. Edge-out opportunities to drive improving FCF results. “We reiterate our Buy rating and our P/T of $18,” Jefferies adds. Knology, Inc. closed Tuesday at $14.51.