CHICAGO _ TPG, a Texas-based private equity firm, has agreed to buy RCN Telecom Services for $1.6 billion, giving it control of one of Chicago's largest cable providers, the company announced Monday.
In a separate transaction, TPG is buying Grande Communications Networks for $650 million, combining the two regional companies into a "top 10" cable player whose most valuable asset is likely its broadband network.
"High-speed data has become, and will remain, the essential connection for both consumers and businesses," David Trujillo, partner at TPG, said in a news release. "Both RCN and Grande are proven leaders in providing fast, affordable, and reliable data services."
Google made a minority financial investment alongside TPG in the cable acquisitions, according to a source familiar with the transaction.
The seller in both deals is Boston-based private equity firm ABRY Partners.
TPG is partnering with Patriot Media, which currently manages both RCN and Grande. The combined networks have more than 640,000 residential and business customers nationwide, according to a TPG spokesman.
New Jersey-based RCN primarily serves Boston, Chicago, New York, Philadelphia, Pennsylvania's Lehigh Valley region and Washington.
The $2.25 billion transactions are expected to close in the first quarter of 2017, according to a TPG spokesman.
TPG's acquisition comes as cord-cutting erodes the traditional cable TV model. But growth in broadband has created a bright outlook for the cable industry, according to a report published last week by research firm SNL Kagan. The report projected that broadband subscriptions will increase by more than 8 million over the next 10 years, more than offsetting slowing declines in video subscriptions.
