ABRY Partners has agreed to acquire broadband provider RCN for $1.2 billion, which includes $536 million in equity plus the assumption of debt.
Shareholders will receive $15 a share, a 22 percent premium over the company's closing price on 4 March. Debt financing for the transaction is being provided by SunTrust Robinson Humphrey, GE Capital and Societe Generale.
Publicly traded RCN delivers broadband as well as digital cable services to homes and small businesses in US metropolitan areas including Boston, Washington DC, Chicago, Philadelphia and New York.
ABRY is funding the deal with capital from its sixth private equity fund, which closed on $1.3 billion in 2008. The firm also is raising a $750 million senior debt fund, ABRY Advanced Securities Fund, to provide senior debt to media, communications, business and information services companies.
In December, ABRY registered its portfolio company Language Line Services, which provides interpretation services, for a $400 million initial public offering.
ABRY was founded in 1989 by Andrew Banks and Royce Yudkoff, who both served as partners of the media practice at Boston-based management consulting specialist Bain & Company.
The deal is the latest of a series of transactions agreed in recent weeks that were worth around $1 billion or more. Earlier this month, Bain Capital agreed to acquire the Styron plastics unit from Dow Chemical for $1.6 billion, while Thomas H Lee Partners struck a $928 million deal for hamburger chain operator CKE Restaurants.
In February, Bain teamed with Advent International and Berkshire Partners on the $1.1 deal for SkillSoft, an internet-based training company. In late January, Kohlberg Kravis Roberts purchased UK retailer Pets at Home from Bridgepoint for £955 million.