Telephone and Data Systems (TDS), owner of US Cellular, has agreed to buy the majority of US cableco Baja Broadband for US$267.5m from private equity firms M/C Partners and Columbia Capital.
TDS said it had acquired “substantially all” of Baja’s…
Telephone and Data Systems (TDS), owner of US Cellular, has agreed to buy the majority of US cableco Baja Broadband for US$267.5m from private equity firms M/C Partners and Columbia Capital.
TDS said it had acquired “substantially all” of Baja’s assets in the all-cash transaction. It described the company as a “natural extension” to its subsidiary TDS Telecom, the seventh largest local exchange carrier in the US.
RBC Capital Markets served as an advisor to M/C Partners and Columbia Capital and as the exclusive M&A advisor to Baja Broadband. Waller Capital Partners also advised M/C Partners and Columbia Capital on the transaction, and Edwards Wildman Palmer was legal counsel to Baja.
The deal is subject to regulatory approval and TDS said it expects it to close during Q3.
In its annual report TDS said it may make further opportunistic acquisitions in telecom and cable businesses in the future. It said its acquisition strategy was to identify and target companies that support cost economies and complement TDS Telecom’s product and services growth strategy.
Baja operates video, broadband and voice services via cable across Colorado, New Mexico, Texas and Utah. It generated US$82.4m in revenues for 2012.
“Baja has been a successful investment for us, and we have enjoyed a terrific working relationship with the management team,” said Gillis Cashman of M/C Partners. Commenting on the deal TDS CEO LeRoy Carlson Jr. said: “We continue to seek opportunities to invest our resources where we believe they can deliver strong returns over time, and expand into adjacent businesses like cable and hosted and managed services that enable us to leverage our core competencies to support our strategy to grow profitably”.
TDS currently offers wireless, broadband, television and fixed-line telephony through its three subsidiaries. Besides mobile operator US Cellular it owns local exchange carrier TDS Telecom and TDS Hosted & Managed Services. As a whole TDS reported total operating revenues of US$4.6bn for 2012.
