Cable One Inc. (NYSE: CABO) has agreed to purchase telecommunications and cable acquisition company Rural Broadband Investments LLC (RBI) from GTCR in a deal valued at approximately $735 million. The transaction is expected to close in the second quarter of 2017.
RBI touts itself as the nation’s 13th largest cable operator by homes-passed. Founded in 2012, the Overland, Kansas-based company is focused on acquiring broadband infrastructure assets that deliver communication services including cable television, telecom and broadband services. RBI targets rural-focused broadband assets that serve residential and business consumers in small and mid-sized communities, usually with population centers between 25,000 and 250,000 residents. In April 2013, GTCR-backed RBI purchased NewWave Communications and completed five add-on acquisitions aftewards.
Cable One is an American cable service provider operating out of its headquarters in Phoenix. The buyer serves nearly 700,000 customers across 19 states with cable television, internet and telephone services. Cable One, which was previously owned by Graham Holdings Company, became a publicly traded telecom provider in July 2015.
GTCR is a Chicago-based private equity firm that has invested in more than 200 companies across the financial services and technology, healthcare, and technology, media and telecommunications industries. The firm has invested more than $10 billion in capital since its inception in 1980. GTCR's investments is underlined by the Leaders Strategy, a program that involves "finding and partnering with management leaders in core domains to identify, acquire and build market-leading companies through transformational acquisitions and organic growth." GTCR recently created a new trading technology provider through the merging of Dash Financial and LiquidPoint. In Nov. 2016, the firm purchased telecom network provider Inteliquent to merge with portfolio company Onvoy LLC. GTCR won Mergers & Acquisitions' 2013 M&A Mid-Market Private Equity Firm of the Year award.
M&A surrounding television programming and cable operations have begun to pick up in the middle market. Media billionaire Rupert Murdoch, through his company 21st Century Fox Inc., recently agreed to buy European pay-TV provider Sky Plc for nearly $14.6 billion. Other related deals include: Moore Frères & Company’s completed purchase of Opera TV for its over-the-top (OTT) video streaming software; AMC Networks’ $65 million investment in RLJ Entertainment Inc. (Nasdaq: RLJE), a company backed BET founder Robert L. Johnson; and Walt Disney Co.’s (NYSE: DIS) June 2016 agreement to buy a one-third stake in the video-streaming unit of MLB Advanced Media.
SunTrust Robinson Humphrey, Inc., Waller Capital Partners LLC and Garrett M. Baker Advisors are serving as financial advisers to RBI and GTCR, while Kirkland & Ellis LLP is working as legal counsel. PriceWaterhouseCoopers also represents RBI and GTCR as accounting adviser on the deal.