- '84 riots: SC forms body to examine SIT decision to close 199 cases
- China Uses Chequebook Diplomacy To Sideline India In Nepal
- NDRF rescues 28000, including 6 pregnant women, from floods
- Rahul Gandhi launches Indira Canteen project in Bengaluru
- Just by fulfilling its commitment to SC, Trai can bring down mobile call rates by half
- Google to Pay Apple $3 Billion to Remain Default iOS Device Search Engine
- Daniel Craig confirmed as 007 in upcoming James Bond film Bond 25
TPG to acquire two US cable companies for $2.25 bn
MUMBAI: Cable TV networks continue to attract investors. TPG Capital, a global private equity fund, has agreed to acquire two regional cable providers, RCN Telecom Services and Grande Communications Networks, for $2.25 billion.
RCN is being acquired for $1.6 billion and Grande for $650 million from private equity firm Abry Partners.
TPG will combine the assets to create a top ten US cable company and a regional market-leading provider of next-generation, high-speed data to residential and business customers. RCN is estimated to have 289,000 video subscribers in markets including New York, Boston and Philadelphia. Grande, on the other hand, has 88,000 TV customers in Dallas and Austin, Texas.
Google’s investments will give the search-engine giant another foot in the door for TV and broadband delivery. “In addition to providing these services directly to consumers in some cities through Google Fiber, the Mountain View, California-based company has been exploring various ways to get more involved in television, from YouTube programming to cable set-top boxes. Grande was actually the first cable provider to introduce a gigabit service in Austin following Google Fiber’s push into the city. Google Capital, which specializes in later-stage investments, operates as a separate entity from Google Fiber,” Bloomberg reported.
TPG is partnering with Patriot Media, the management team headed by Steve Simmons and Jim Holanda that currently manages both RCN and Grande. RCN and Grande are leading local broadband providers with technologically-advanced networks that offer a full suite of internet, video, and phone services to both residential and business customers. The companies have built modern, high-quality, high-speed communications networks that together serve markets in Austin, Boston, Chicago, Dallas, Lehigh Valley, New York, Pennsylvania, San Antonio, and Washington, DC. Patriot Media, which has managed RCN since 2010 and Grande since 2013, has led both businesses through significant periods of growth.
“The way that content is distributed and consumed has evolved significantly in ways that create an overwhelming demand for affordable, high-speed cable networks. There is an unprecedented amount of diverse, creative content being produced that is extremely bandwidth intensive. Consumers are craving access to that content through various internet-connected devices in the home all at once. This places never-before-seen demands on the underlying infrastructure. High-speed data has become, and will remain, the essential connection for both consumers and businesses. Both RCN and Grande are proven leaders in providing fast, affordable, and reliable data services. We look forward to partnering with the Patriot Media management team to invest in this critical communications infrastructure,” said TPG partner David Trujillo
The combined entity of RCN and Grande will challenge incumbent telco and cable operators by focusing on providing high-quality and more reliable communications services along with better value and customer service than incumbent competitors. By providing access to great high-speed broadband connectivity, the new company will be at the forefront of high-speed data disruption. As part of the partnership with TPG, Patriot Media will continue to make significant investments in the network and in technology that will enable RCN and Grande to expand Gigabit per second high-speed data services, creating the premier internet experience in their markets.
“On behalf of our 2,000 plus team members we are very eager and excited about partnering with a premier investor such as TPG to take the two companies to new levels of customer satisfaction and performance. Their deep experience creating and growing networks makes them the ideal partner to help us build on a vision of delivering the best broadband and overall customer experience,” said Patriot Media CEO Jim Holanda.
The transaction is expected to close in the first quarter of 2017 and is subject to customary closing conditions, including regulatory approvals.
Abry managing partner co-CEO Jay Grossman said, “This has been a long and successful partnership with Patriot Media in conjunction with our investments in RCN and Grande, as well as a successful outcome for Abry. We wish the Patriot Media team well as they continue to operate the combined business together with TPG.”
This investment reflects TPG’s strategy of identifying and partnering with unique companies that are at the forefront of thriving and evolving industries. For more than a decade, TPG has been engaged with the changing landscape of content creation, distribution, and consumption. The firm has partnered with companies poised to take advantage of growth trends in the space, such as leading sports and entertainment intermediary CAA; live entertainment company Cirque du Soleil; leading online education platform Lynda.com; leading music streaming service Spotify; motion picture, television, and digital content studio STX; and Spanish-language broadcast television network Univision. Additional investments made by TPG in the internet and digital media space include Airbnb, Ipsy, RentPath and Uber.
The cable TV sector has seen a spate of deals in the US. Charter acquired Time Warner Cable while Altice NV bought Cablevision Systems.