TPG To Pay $2.25B In Massive Cable Merger by PitchBook

TPG has agreed to acquire two US regional broadband services providers, RCN Telecom Services and Grande Communications Networks, from ABRY Partners in separate transactions worth $1.6 billion and $650 million, respectively. Combining the businesses will allow TPG to create a top 10 US cable company and a major provider of high-speed data to residential and business customers, taking advantage of growing consumer demand for streaming services like Netflix and Spotify. The deal, which reportedly includes participation from co-investor Google Capital, is expected to close in 1Q 2017. ABRY bought RCN at a $1.2 billion total value in 2010 and recapitalized Grande in 2009.

TPG Capital

The merger of RCN and Grande represents further consolidation in the telecom space, but this deal is far from a bid to take on any of the giants in this industry like Comcast or Charter. Rather, TPG is following recent trends among PE firms by scooping up several regional broadband service providers, bundling them into a single entity and, in some instances, preparing them for acquisition by a larger competitor. One firm stands out as the busiest investor in US cable, internet and telecom service providers, and it’s not ABRY: GTCR has completed 12 deals since the start of 2009, 33% more than its nearest competitor.

Here’s a list of the most active PE investors in the space across that timeframe, including add-ons:

1. GTCR (12)

2. M/C Partners (9)

T-3. ABRY Partners (8)

T-3. KKR (8)

5. GI Partners (7)

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