Hicks Muse adds to cable portfolio

The Texas-based buyout house has agreed to acquire Centennial Puerto Rico Cable TV Corp. in a $155m cash-funded buyout.

Hicks Muse Tate & Furst, the Dallas-headquartered international buyout firm, has signed an agreement to acquire Centennial Puerto Rico Cable TV Corp. (CCTV) in a deal valuing the company at approximately $155 million.

The deal is subject to regulatory approval. CCTV is being sold by Centennial Communications Corp., which is based in Wall, New Jersey.

Peter Brodsky, a partner at Hicks Muse, led the deal on behalf of the firm. Brodsky said in a statement that the firm intended to work closely with CCTV’s incumbent management as well as “in partnership with HTMF-affiliated cable executives” to help the company fulfil its growth potential. 

According to a Hicks Muse spokesperson, CCTV currently has access to about 300,000, or roughly a third, of Puerto Rican households, similar to the respective shares of other incumbents Liberty Media and Adelphia but with a lower actual penetration rate. As a result, the source said, Hicks Muse is confident that by focusing on CCTV’s marketing, as opposed to investing in infrastructure, significant growth can be achieved relatively easily. CCTV currently has 73,000 cable and 5,000 Internet subscribers. 

Hicks Muse has now acquired 11 cable operators in countries including Argentina, Poland, Venezuela, Brazil and Mexico. Its first engagement in the sector came in 1995, when it acquired Marcus Cable of Canada.    

The CCTV deal will be funded by way of an equity and debt package. Details of the financial structure have not been disclosed.

Hicks Muse will be investing from its 2001 $1.5 billion Hicks Muse Tate & First Equity Fund V, which prior to CCTV had about $650 million of capital left to invest, the spokesperson said. The firm expects to own the company for at least three and up to seven years, he added.