Scripps Networks Interactive Inc. (NYSE: SNI), owner and operator of the Food Network and HGTV lifestyle television networks, will enter into a joint venture with Cox Communications Inc. by which it will acquire a controlling interest in the Travel Channel. The two companies have signed a definitive agreement that, upon completion, will result in Scripps Networks Interactive owning 65 percent of the Travel Channel and Cox Communications retaining a 35 percent minority stake in the network.
,br /> The Travel Channel transaction is expected to be completed by or before January 2010. Launched in 1987, Travel Channel has grown to become one of America’s best known cable television networks and today reaches about 95 million U.S. television households. The television network — the cornerstone of Travel Channel Media — supports a growing range of cross-platform initiatives including Internet, mobile and social media applications. As proposed, the transaction is structured as a leveraged joint venture between Scripps Networks Interactive and Cox Communications. Cox will contribute the Travel Channel, valued at US$975 million, and Scripps Networks Interactive will contribute US$181 million in cash to a newly created partnership. The partnership, in turn, will take on US$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 US$696 million in net debt.