Scripps Networks (NYSE: SNI) announced Thursday that the company is taking a controlling stake in the Travel Channel, giving the cable network a value of nearly $1 billion, according to Associated Press.
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Scripps, the company behind the Food Network, said Thursday it will take a 65 percent stake in Cox Communications Inc.'s Travel Channel, which reaches about 95 million U.S. households. It has been chasing the channel since June.
Under the joint venture agreement, Scripps Networks will contribute $181 million in cash. Cox, in turn, will contribute the Travel Channel, valued at $975 million.
The partnership will then take on $878 million of debt that will be guaranteed by Scripps, with the proceeds to be distributed to Cox. In the end, the partnership will have about $696 million of net debt, Scripps said.
The Travel Channel is home to popular shows such as Anthony Bourdain's "No Reservations," where the sharp-witted author and chef trots the globe in search of tasty local cuisine and color. Many of its other popular shows, like "Bizarre Foods" and "Man v. Food," also revolve around eating. Scripps also owns HGTV, with home improvement, decorating and do-it-yourself shows like "Real Estate Intervention" and "Renovation Realities."
News Corp. (NASDAQ: NWSA), Discovery Communications Inc. (NASDAQ: DISCA) and Time Warner Inc. (NYSE: TWX) were also in the running for the Travel Channel, noted Deutsche Bank analyst Doug Mitchelson. He said the channel is a good fit with Scripps' existing networks, and its strength as a brand should help the company as it pursues international growth.
The companies expect to close the deal by January.
Scripps also said it is delaying its third-quarter earnings report, by one day, until Friday.
Shares of Scripps Networks rose 62 cents to $39.23 in Thursday trading.
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