Telecom cloud

Private Equity Firm Acquires Two Broadband Service Providers

TPG Capital, a private equity fund, has acquired RCN Telecom Services and Grande Communications Networks LLC from ABRY Partners for $1.6 billion and $650 million, respectively. TPG will combine the assets to create a top ten U.S. cable company and broadband provider serving consumers and businesses.

Together, RCN and Grande Communications have broadband networks that span Austin (Texas), Boston (Mass.), Chicago (Illinois), Dallas (Texas), Lehigh Valley (Pennsylvania and New Jersey), New York, Pennsylvania, San Antonio (Texas), and Washington, DC.

The M&A deal's strategy sounds remarkably straightforward. According to TPG:

"The combined entity of RCN and Grande will challenge incumbent telco and cable operators by focusing on providing high-quality and more reliable communications services along with better value and customer service than incumbent competitors."

Patriot Media CEO Jim Holanda will oversee the combined broadband providers, and Patriot will continue to make investments that expand gigabit-per-second data services, TPG said.

The TPG Capital deal comes amid the ever-shifting broadband and telco markets. Google, for instance, could be rethinking its long-term broadband plans amid higher-than-expected deployment and support costs for its fiber networks, multiple media outlets are reporting. And giants like CenturyLink and Verizon have been retreating to network services; each of those businesses hopes to sell off its respective cloud data centers later this year.

 

 

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.