By Nadia Damouni and Kenneth Li
NEW YORK (Reuters) - Insight Communications Co, controlled by The Carlyle Group, has put itself up for auction, seeking a deal valuing the U.S. cable operator at up to $4 billion, people close to the deal told Reuters.
Insight, the tenth largest cable operator in the United States according to Carlyle's website, has hired Bank of America Merrill Lynch and UBS AG to run the process after a competitive series of banker meetings in February.
Insight is seeking a deal that could value it at $3.5 billion to $4 billion, when the auction kicks off over the next month, the sources said. The company carried $1.8 billion in long-term debt on its balance sheet at the end of December 2010.
"We have been the subject of those rumors since I can remember," an Insight spokeswoman said. "Our goal is to stay focused on building our company and proving all of its products, as well as its customer service."
Media and communications companies are hoping the slew of deals -- on the heels of AT&T Inc's $39 billion bid to buy Deutsche Telekom AG's T-Mobile USA -- and favorable lending conditions have whetted buyer appetites.
In June, Cablevision agreed to pay $1.37 billion to buy mid-size cable television company Bresnan Communications, trumping bids from private equity parties during the auction. This marked one of the first major cable sales since the credit crisis.
Other cable operators and private equity firms will be invited into the auction, these people said. Potential buyers include Time Warner Cable Inc, Cablevision Systems Corp, Charter Communications Inc and Suddenlink Communications Inc, one source said.
Private equity firms that have been eager to build their portfolio of cable assets include Providence Equity Partners, and Blackstone Group LP.
Washington D.C.-based Carlyle bought Insight for $2.1 billion, including debt, in a December 2005 management-led leveraged buyout. Just two years later, Carlyle put the company up for sale.
But by the end of 2007, the sale was postponed as the credit market turmoil had curtailed bids from potential suitors.
Last April, Insight announced an investor group led by Crestview Partners and MidOcean Partners purchased a significant equity position in the cable company from existing shareholders, including Carlyle. Carlyle and the new investor group each hold an equity interest of about 42 percent in Insight.
Insight sells cable television, high-speed Internet and telephone services to its customers, serving around 750,000 in Illinois, Indiana, Kentucky and Ohio.
Carlyle announced at the end of last year that it was buying Syniverse Technologies, a provider of technology and business solutions for the global telecommunications industry, for about $2.6 billion.
That same month, the private equity firm announced it would be buying communications cable maker CommScope Inc for about $3 billion, as it looks to bolster its telecommunications holdings by acquiring one of the top infrastructure suppliers to wireless carriers.
Carlyle declined to comment.
(Reporting by Nadia Damouni and Kenneth Li; additional reporting by Megan Davies; editing by Andre Grenon)