Stonepeak buys Astound from TPG in $8.1bn deal

January 2021 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

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January 2021 Issue

In what is the largest private equity (PE) acquisition in the past five years, infrastructure PE firm Stonepeak Infrastructure Partners has acquired cable provider Astound Broadband from investment management company TPG Capital in a deal valued at $8.1bn.

Stonepeak’s investment in Astound reflects its strategy of partnering with leading management to support market leaders within digital infrastructure and enable growth through incremental capital investment. Moreover, Stonepeak has been an early and active investor in digital infrastructure, with multiple investments across the data centre, fibre and wireless space.

Stonepeak’s acquisition of Astound will see it partner with Patriot Media Consulting – a telecommunications service provider engaged in the evaluation, acquisition and management of cable investments which currently manages Astound. Patriot Media is at the forefront of residential and business connectivity transformation, providing customers across the US with access to great high-speed broadband along with other innovative TV and phone services.

As part of its partnership with Stonepeak, Patriot Media will continue to invest significantly in the network and in technology, enabling Astound to expand and grow its fibre rich infrastructure and deliver gigabit per second high-speed data services, creating the premier internet experience in their markets.

“We are delighted to partner with Astound for the next chapter of growth,” said Brian McMullen, a partner at Stonepeak. “Astound is the premier operator of critical broadband infrastructure in the US with a long history of delivering market leading customer service and network performance to communities across the country. In our increasingly connected society, we believe there is an extraordinary opportunity to deliver faster speeds and greater coverage, fundamentally enabling many aspects of everyday life.”

The sixth largest cable operator in the US, Astound operates leading regional providers RCN, Grande, Wave and enTouch. The company currently serves over 410,000 customers in Washington, Oregon and California.

“We have created a market leading broadband platform with national reach, broad capabilities and expertise and exciting growth potential,” said Jim Holanda, chief executive of Patriot Media. “We are very eager and excited to partner with a premier investor such as Stonepeak to further accelerate our growth and take our companies to new levels of customer satisfaction and performance. We also want to thank TPG for their great support and partnership over the past four years.”

Acting as financial advisers to Stonepeak are BofA Securities and Lazard, with Simpson Thacher & Bartlett LLP serving as legal counsel. J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC are acting as financial advisers to Astound, while Cleary Gottlieb Steen & Hamilton, LLP and Seyfarth Shaw, LLP are serving as legal counsel.

“We have had a long-held theme and belief in the growing value of broadband infrastructure, culminating in our successful investment in Astound Broadband, in partnership with Patriot Media,” said David Trujillo, a partner at TPG. “We are proud to have been part of the company’s journey, which has been characterised by significant platform expansion, strong growth and great leadership.”

The transaction is expected to close in the second quarter of 2021, subject to customary closing conditions, including regulatory approvals.

Steve Simmons, chairman of Patriot Media, concluded: “Our mission and management vision are aligned with Stonepeak and we very much look forward to our partnership with them.”

Fraser Tennant