TPG, a private equity firm with $70 billion in assets under management, is buying the two regional cable providers from ARBY Partners, another private equity firm with significant investments in communications and media.
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With high-density video quickly ramping up broadband traffic, and cable positioned to cash in, TPG said it’s the right time to invest in the US cable business.
The transaction, which totalled $2.25 Billion ($1.6 billion and $650 million, respectively), is expected to close in the first quarter of 2017 subject to customary closing conditions, including regulatory approvals.
Patriot Media, an independent cable system investment and management firm will manage the RCN and Grande properties, continuing a role they established in 2010 (RCN) and 2013 (Grande).
New Jersey-based RCN primarily serves Boston, Chicago, New York, Philadelphia, Lehigh Valley (Pa.) and Washington. 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.”, David Trujillo, partner at TPG, says. RCN Business now provides traditional cable, phone and internet services to businesses on the East Coast and Chicago, while Grande offers similar business services in Texas. In lieu of reliable, affordable high-speed service choice some municipalities have attempted to set up municipally supported networks, but those efforts have come under attack from private providers. Smaller companies like RCN and Grande have been acquisition targets in recent years as providers try to move into new areas or take market share away from big providers like Verizon and AT&T, but that often means fighting over higher population cities and towns at the expense of rural areas or small localities. “We wish the Patriot Media team well as they continue to operate the combined business together with TPG”. Its investments also include Airbnb, Ipsy, RentPath and Uber.
TPG was advised on the transaction by PJT Partners, UBS, Cleary Gottlieb, and Deloitte.
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In its press release confirming the widely rumored deal, TPG said that it will partner with Patriot Media, the management team headed by Steve Simmons and Jim Holanda that now manages both RCN and Grande.
