TPG goes on $2.25bn spending spree to create new US cable player

Private equity fund TPG Capital has entered into a definitive agreement to acquire broadband providers RCN Telecommunications and Grande Communications for $2.25 billion.

The deal will see TPG Capital work through two separate transactions with ABRY Partners to acquire the businesses, worth $1.6 billion for RCN and $650 million for Grande Communications. The team has stated the two businesses will be merged to create a larger organization, with the deal expected to complete in the first quarter of 2017.

“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,” said David Trujillo, a Partner at TPG.

“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.”

The two businesses, which are currently managed by Patriot Media, offer a suite of internet, video, and phone services to both residential and business customers. Both businesses have been going through a period of growth under the Patriot Media management, and will combine to offer services throughout the US in such areas as Austin, Boston, Chicago, New York, Pennsylvania and Washington DC. Patriot Media will continue to manage the new organization in partnership with TPG Capital.

“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,” said Jim Holanda, CEO of Patriot Media. “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.”