NEW YORK — As financial markets crashed and burned around it, Discovery Communications said Wednesday it raised a whopping $700 million in a so-called private placement and that it plans to use the cash to pay down debt and extend its brand.
“This agreement gives Discovery the flexibility to continue growing our business both in the United States and around the world,” founder and chairman-CEO John Hendricks said. Execs said the cash won’t be used for major acquisitions.
Merrill Lynch orchestrated the transaction, where several dozen institutional investors were able to buy three types of bonds — 5-year, 7-year and 10-year — issued by Discovery. Since Discovery, a private company, didn’t turn to the public debt or equity markets for the cash, fewer details were released.
Discovery has 33 networks around the world and a growing retail business. It’s owned 49% by John Malone’s Liberty Media, while Advance/Newhouse, Cox Communications and Henricks own most of the rest.
The success of the private placement, which Discovery reps said was twice as large as they’d originally anticipated, is a testament to the strong brand, led by the flagship Discovery Channel. Other nets include TLC, Animal Planet and the Travel Channel.. In a statement, the company said the placement was the largest private media transaction in the last 10 years.
Discovery, which will post estimated revenue of $2 billion this year, has about $2 billion in debt.
The company has been rumored to be for sale itself, although execs have mostly quashed that speculation. Wall Streeters claim the circa $25 billion valuation its owners place on the company is too far from the circa $12 billion it could sell for.