Dallas-based private equity firm Hicks, Muse, Tate & Furst will lead a private equity consortium consisting of TD Capital Canadian Private Equity Partners and CIBC Capital Partners, both based in Toronto, to privatise Persona, Canada’s sixth largest cable operator, for C$406 million ($303 million).
Under the terms of the deal, the consortium will acquire all issued and outstanding common shares of Persona, which is publicly traded on the Toronto Stock Exchange, for C$6.80 per share in cash, according to a press statement. The company expects to complete the transaction after shareholders and optionholders vote in April.
Persona currently operates 663 systems across Canada, serving nearly 223,000 subscribers in Alberta, British Columbia, Manitoba, Newfoundland, Ontario, Quebec and Saskatchewan. The company also provides Internet access and other telecommunications services in these areas.
According to the statement, Persona had been considering going private since April 2003. In June, the board of directors formed a special committee to “conduct the review of strategic alternatives,” with financial advising being provided by TD Securities Inc.
After the deal is completed, Persona will refocus its business strategy on its Canadian operations. Philip Keeping, a 14 percent shareholder and director of Persona, will acquire Persona subsidiary Persona Communications (Barbados) Inc.
“Our firm has a long and successful history of investing in the cable industry, and the acquisition of Persona is a great opportunity for us to create value in the sector once again,” said Hicks Muse partner Peter Brodsky in a statement. “Persona owns well-managed systems in all of Canada’s most populous provinces and has made considerable progress in implementing digital technology throughout its service area.”
Hicks Muse’s last major cable investment took place in 1998, at the height of its activity in Latin America when the firm had just raised a $950 million fund for investment in the region. The same year, the firm paid $720 million for a 32.7 per cent interest in CEI Citigroup Holdings, Argentina’s largest phone and cable operator. Hicks Muse gained control of the CEI Citigroup in 1999 for an additional $125 million when its CEO, Raul Moneta, went into hiding after Argentinean authorities issued a warrant for his arrest related to banking improprieties. Charges were later dropped.
Hicks, Muse, Tate & Furst currently manages approximately US$11 billion and has offices in London, New York and Buenos Aires. This past November, Hicks Muse agreed to buy UK breakfast cereal maker Weetabix in a privatisation that valued the company at approximately £642 million ($1.09 billion). The firm will add the business onto its Premier Foods platform.
CIBC Capital Partners is the division of Canadian Imperial Bank of Commerce that invests for CIBC World Markets globally. The firm currently has approximately C$4 billion committed in its portfolios.
TD Capital Canadian Private Equity Partners is the fund controlled by TD Capital, the private equity arm of TD Bank Financial Group. TD Capital currently manages approximately C$3 billion of capital under management through its offices located in Canada and the United States.