PE Firm Takes Cable Overbuilder RCN for $1.2 Billion
March 8, 2010
HERNDON, VA.: Cable TV overbuilder RCN is being bought out by
private equity investors ABRY Partner in a deal valued at $1.2 billion. Boston-based
ABRY agreed to a price of $15 per share, or around $536 million, and the
assumption of RCN’s debt, which stood at $730 million at the end of last
September. RCN shares jumped from about $12.20 to more than $15 upon news of
The deal is structured such that RCN can solicit counter-offers through April
14. RCN reported a net loss of $6 million on revenues of $192 million for the
ABRY manages about $2.75 billion and specializes in media and information
technology companies. It owned Muzak before the elevator-music company filed
for bankruptcy last year. RCN emerged from its own Chapter 11 bankruptcy in
2004. The company has mostly fiber-optic systems along the Eastern Seaboard in
Boston, Philadelphia, Washington, D.C. and Allentown, Penn.
ABRY is providing equity investment; debt financing is being provided by
SunTrust Robinson Humphrey, GE Capital, Société Générale and certain of its
Kagan said. Deutsche Bank Securities and Waller Capital Partners LLC acted
as financial advisors to RCN; SunTrust Robinson Humphrey was ABRY financial
advisor. The firm will also be left lead joint book runner and administrative
agent for the debt financing, Kagan said. GE Capital Markets and SG Americas
Securities are acting as joint book runners for the debt financing.
The deal is expected to be completed the second half of this year pending
stockholder and regulatory approval.