Blackstone, Bain and NBC pick up Weather Channel

The consortium will contribute roughly equal portions of equity for the Atlanta-based cable network, valued at roughly $3.5 billion. NBC will try to integrate the network's television and online properties into its own media platforms.

The Blackstone Group, Bain Capital and NBC Universal have purchased US cable network The Weather Channel, less than a month after entering exclusive negotiations with the Atlanta-based weather service.

Although no financial figures have been disclosed, a source familiar with the transaction confirmed that the deal valued the cable channel and its popular online platform at approximately $3.5 billion (€2.2 billion). That price tag will be roughly evenly split among the consortium.

Deutsche Bank Securities, GE Commercial Finance, Bain-affiliated Sankaty Advisors and Blackstone-owned GSO Capital Partners will provide debt financing for the buyout. The deal is expected to close at the end of the year after meeting necessary regulatory approvals.  

“We are extremely excited about the growth potential of the business, and strongly believe the partnership among the team at The Weather Channel, the management at NBC Universal, and private equity firms with deep media industry experience will continue to develop this unique media asset,” Ian Loring, managing director at Bain, said in a statement.

Under the terms of deal reached between the consortium and Norfolk, Virginia-based media company Landmark Communications, television network giant NBC would assume management duties at the cable channel’s Atlanta headquarters.

The Weather Channel is one of the most widely distributed cable channels in the US, reaching more than 96 million US households and penetrating 97 percent of homes with cable subscriptions.

Along with the flagship cable channel, the consortium will gain ownership of The Weather Channel’s highly coveted website, NBC will attempt to integrate the site, which generates a whopping 40 million unique users each month, with its own online weather applications.

The ownership group will also acquire Weather Services International, a business to businesses forecasting service provided by The Weather Channel for the media, aviation, marine and energy sectors. Weather Services International currently alerts 5,500 clients in 45 countries to potentially disruptive weather developments.

Bain and Blackstone have teamed up for several deals before, most notably the $6 billion buyout of arts and crafts retailer Michael’s two years ago.

Boston-based Bain has been highly active in the media sector over the last few years. Its past media-related investments include Warner Music Group, AMC Entertainment and Cumulus Media. The firm’s $1.4 billion takeover of telecom giant Clear Channel closed last May after months of legal wrangling.