As part of the transaction, Google Capital will acquire a minority stake in both companies, the Wall Street Journal reported, citing anonymous sources.
TPG will buy RCN for $1.6 billion and Grande Communications for $650 million in agreements with private-equity firm ABRY Partners, expected to close in the first quarter of 2017. The deals will create one of the 10 biggest U.S. cable entities, according to TPG.
For TPG, the acquisition of the two midsize cable companies is all about their high-speed broadband infrastructure. “Consumers are craving access to that content through various internet-connected devices in the home all at once,” TPG partner David Trujillo said in announcing the transactions. “High-speed data has become, and will remain, the essential connection for both consumers and businesses. Both RCN and Grande are proven leaders in providing fast, affordable, and reliable data services.”
The pacts come after a string of larger deals among U.S. pay-TV providers in the past year, including AT&T’s deal for DirecTV; Charter Communications’ acquisitions of Time Warner Cable and Bright House Networks; and Altice’s purchase of Cablevision Systems.
Under the terms of the deal, TPG is partnering with Patriot Media, which has managed RCN since 2010 and Grande since 2013. Patriot Media, headed by Steve Simmons and Jim Holanda, has more than 2,000 employees.
Markets served by RCN and Grande include New York, Boston, Chicago, Dallas, Austin and San Antonio, Texas, Lehigh Valley, Pa., and Washington, D.C.
Other companies in TPG’s investment portfolio include CAA, Spotify, Cirque du Soleil, STX Entertainment, Univision Communications and online education platform Lynda.com.