Boston-based private equity firm ABRY Partners is expected to close its leveraged buyout of Grande Communications on Monday, peHUB has learned.
ABRY will take around a 75% stake in Grande, a San Marcos, Texas-based broadband services provider, at an enterprise value of approximately $270 million. The remaining 25% will be held by Grande’s venture capital shareholders, who have invested more than $340 million since 2000.
We’re told that ABRY will finance around half of the transaction with debt, which was arranged by SunTrust Bank. The new facility would wipe out $200 million of existing Grande junk bonds that date back to 2004.
“This is the largest cable TV deal since 2006,” says a source close to the transaction.
Grande originally hired investment bank Waller Capital to “explore strategic alternatives” back in late 2007, and a nascent sale process began late in the first quarter of 2008. It effectively got sidetracked by the credit crisis, but picked back up earlier this year.
I asked my source if Grande was disappointed in the final deal’s valuation, given that it had been valued at nearly $600 million by venture capitalists back in 2003. “I don’t think anyone really believes in those valuations… They were part of the communications mania that began in 1998 or 1999. [Grande] nearly doubled its EBITDA in the last year, so it’s growing not shrinking.”
Grande currently has around 100 shareholders who will share that 25 percent. They include Alta Communications, Atlas Venture, Austin Ventures, Centennial Ventures, CIBC, Convergent Investors, Kinetic Ventures, GE Equity, HarbourVest Partners, Lightspeed Venture Partners, Opus Capital, Norwest Equity Partners, Prime New Ventures, PNC Equity, South Atlantic Venture Funds, TD Capital, Trinity Ventures and Whitney & Co.