Charter to buy HSA assets for $81.1 M cash
Charter Communications Inc. will acquire assets of High Speed Access Corp. for $81.1 million in cash, the two agreed. Charter had bid $73 million July 31, when HSA said it would consider the offer.
Under the deal, Charter also will assist HSA's management through the process.
The agreement says Charter will buy substantially all of the assets used by HSA to service Charter's high-speed data customers, it says. The deal is subject to certain closing adjustments and indemnity reserves, and the assumption of certain liabilities, Charter says.
Likewise, Charter's 75,000 shares of HSA's Series D Senior Convertible Preferred stock, also held by Charter affiliate Vulcan Ventures Inc., will be cancelled, as will all of Charter's warrants to buy shares of HSA's common stock.
HSA CEO Daniel J. O'Brien says the deal is part of the company's exit from certain cable markets, in line with a cost-cutting effort. The company has finished its exit from one-way cable TV markets, he says, and is completing a similar exit from all two-way cable system agreements, save for Charter's. It is pursuing the sale of its Digital Chainsaw division and halted its entry into the DSL market, he says.
"At the present time, with the exception of the continuing Charter operations, the wind-down of our non-Charter turnkey and Web hosting businesses, the only assets we are operating are those directly related to the provision of international cable-based Internet services to Kabel Nordrhein-Westfalen GmbH. & Co. KG in Germany," O'Brien says in a statement. HSA has a three-year master services agreement with the company, which it expects to be profitable for the year.
O'Brien says HSA also has cut its workforce to those included in the Charter purchase and "those necessary to operate any assets to be operated as a going concern after the closing," and to work on the wind-down of its remaining assets.
He notes the company hasn't determined what the sale's effect will be on ongoing operations and obligations.
O'Brien says market conditions and HSA's inability to find financing led to the sale.