Knology keeps couch potatoes knowledgeable about their local TV listings. The company provides voice, video, and data services through its interactive broadband network. It offers bundled cable TV, phone, and high-speed Internet access to residential and business customers, primarily in midsized markets in the southeastern US. Knology gets 45% of sales from cable service; phone service accounts for about 26%, and Internet services make up another 25%. WideOpenWest (dba WOW! Internet, Cable & Phone) bought Knology in 2012 in a going private transaction valued at around $1.5 billion.
With the purchase of Knology, WOW! expands into the upper Midwest, Southeast, and Kansas regions. Combined, the two companies serve some 800,000 customers in 13 states. Its products and services are available to an additional two million households. WOW! brought operations in Michigan, Illinois, Indiana, and Ohio to Knology's presence in about a dozen small cities in Alabama, Florida, Georgia, Kansas, South Carolina, South Dakota, and Tennessee. WOW! is owned by private equity investor Avista Capital Partners.
Knology faces stiff competition from cable industry leaders Comcast and Time Warner, satellite providers DIRECTV and DISH Network, and phone companies, such as Verizon and AT&T, which offer bundled cable, Internet, and phone services. Its focus on smaller markets hasn't been a cash cow, though; the company has been unprofitable throughout its history and has an accumulated deficit of $626 million.
Knology uses periodic acquisitions to expand its service area and add subscribers. To provide better service for its business clients, Knology acquired colocation and data center services provider E Solutions for more than $13 million in 2012. In 2010 it bought Sunflower Broadband for $165 million in cash. Sunflower provides video, voice, and data services to about 35,000 residential and business customers in the Lawrence, Kansas area -- a new market. It also operates its own news station, 6News Lawrence. In late 2009 Knology bought Private Cable Co. (PCL Cable), which provides video, voice, and data services to residential and business customers in the northern Alabama towns of Athens and Decatur. The company is testing a new market, in Auburn, Alabama.
Previous acquisitions include the 2008 purchase of Graceba Total Communications Group for $75 million, which added the Dothan, Alabama market. In 2007 it acquired Internet service provider PrairieWave Holdings for approximately $255 million.
Knology traces its roots back to The Interstate and Valley Telephone Company, which began providing phone service in Alabama and Georgia in 1896. Knology was formed by ITC Holding in 1994 and merged it with The Interstate and Valley Telephone Company. The company's largest shareholder is director and venture capitalist Donald W. Burton, who controls a 13% stake. – less