MidOcean Partners and Crestview Partners confirmed today that they have entered into a definitive agreement with the local subsidiary of Liberty Global Inc. and investment funds affiliated with Searchlight Capital Partners, L.P. to sell 100 percent of San Juan Cable LLC, known as OneLink Communications for $585.25 million.
OneLink is the largest provider of cable TV, high-speed data and telephony services in Puerto Rico and upon merging with Liberty Cablevision of Puerto Rico — Liberty Global’s local subsidiary, and the second largest cable company on the island — will become Puerto Rico’s largest cable carrier.
The transaction is subject to customary closing conditions including regulatory approvals from the Telecommunications Regulatory Board, and is expected to close in the fourth quarter of 2012.
Once the deal closes, Liberty plans to implement its DOCSIS 3.0 network and deploy more fiber to smaller home clusters in the OneLink region so customers can have access to high-speed data services, said Naji Khoury, Liberty Cablevision of Puerto Rico’s managing director.
OneLink’s customers will, over time, be able to experience Liberty’s product portfolio including Internet speeds of up to 30 Mbps with 2 Mbps upload, more than 75 high definition channels, up to 352 channels overall, a better balance of English and Spanish language programming and attractively priced bundled video, Internet and telephony services, he said.
“This investment is proof that our company is committed to Puerto Rico, bringing high-speed internet access to more areas, helping to close the digital divide and advancing Puerto Rico’s Broadband Initiative Plan, of which we are already ahead by two years,” said Khoury.
The transaction will make Liberty Puerto Rico’s leading cable services provider, with a footprint that could reach about 700,000 homes, or about 46 percent more than the 480,000 actual customer base the operator would have as a single company.
“This transaction will make us the leading provider of cable services in Puerto Rico, passing approximately 70 percent of the cable homes on the island and adding substantial scale to our existing Puerto Rican operation,” said Mauricio Ramos, president of Liberty Global Latin America.
“We are convinced that this is the right move to secure our position as the technological leaders of the cable industry on the island,” he said.
Business as usual
Until the transaction is signed, it will be business as usual for both companies. After closing, it is expected that the new company will operate as Liberty Cablevision of Puerto Rico, at which time Liberty will launch an informational campaign directed toward OneLink customers to keep them abreast of the integration process, company officials said.
MidOcean and Crestview, together with co-investors and management, acquired OneLink in October 2005 from Adelphia Communications. The cable provider is based in San Juan and covers eight main cities: San Juan, Guaynabo, Cataño, Bayamon, Carolina, Trujillo Alto, Toa Baja and Toa Alta.
“We are proud of everything we have been able to accomplish at OneLink,” said Jeffrey Marcus, partner at Crestview and long-time cable industry veteran. “OneLink is now a best-in-class cable company with a strong commitment to providing outstanding products and service to our valued customers in Puerto Rico. We are leaving our customers and employees in good hands with Liberty Global and Searchlight, who are very experienced cable operators and investors.”
Liberty, meanwhile, provides service in 37 municipalities throughout the northern, central and eastern regions of the island and currently serves 217,700 video, Internet and digital telephony subscribers.
“We are excited to enter the Puerto Rican market together with Liberty Global. There is clear strategic logic to this transaction, which will enhance the combined company’s ability to offer high quality communications services throughout Puerto Rico,” said Eric Zinterhofer, co-founder of Searchlight, a private investment firm founded in 2010 by senior partners formerly with industry leading investment management firms.