According to industry sources,
), the largest cable TV operator in the U.S., is on the verge of
acquiring online video ad-serving company, FreeWheel. The deal
size is likely to be around $320 million.
In the last couple of years, Comcast has become a behemoth in
the entertainment production and distribution industry. The
company has the best in class video distribution network and it
has become a major content developer after its acquisition of NBC
However, the idea of acquiring FreeWheel is targeted at
controlling the video processing functions, which deal with
technology standards to smoothly integrate video content and
video delivery activities. The acquisition will also boost the
performance of the two reporting segments of Comcast, namely,
Content business and Cable business.
The takeover will enable Comcast to place advertisements on
its own content through several platforms, including TVs and
handheld devices. Similarly, through FreeWheel, other content
developers can offer more TV shows to Comcast's cable platforms
in order to generate more advertising revenues.
FreeWheel has a very strong clientele including NBC Universal,
Fox broadcasting Co., Turner Broadcasting System Inc., Discovery
DISH Network Corp.
), to name a few.
Recently, Comcast announced its decision to acquire Time
Warner Cable for approximately $45.2 billion. If the proposed
deal clears regulatory hurdles, Comcast will benefit from
geographic expansion, gain significant operating cost synergies,
which will boost its bottom line and free cash flow, and acquire
a unique triple-play (voice, video and data) delivery and
high-quality content distribution mechanism. Currently, Comcast
carries a Zacks Rank #3 (Hold).
COMCAST CORP A (CMCSA): Free Stock Analysis
DISH NETWORK CP (DISH): Free Stock Analysis
DIRECTV (DTV): Free Stock Analysis Report
AT&T INC (T): Free Stock Analysis Report
To read this article on Zacks.com click here.