Abry partners to acquire RCN for $1.2 billion
RCN, one of the original so-called cable overbuilders to emerge in the mid-1990s, has agreed to be acquired by private equity firm Abry Partners for about $1.2 billion. News of the acquisition has been greeted favorably by investors as the company's shares rose 23 percent.
Under the terms of the deal, RCN investors will get $15 in cash for each RCN share, which is a 22 percent premium to yesterday's closing price. Abry will also assume $669 million of RCN's debt.
Expected to close in the second half of the year, RCN is allowed to solicit other offers through April 14. Selling itself out right now is not a bad idea for RCN. While RCN has been diligently expanding its optical network to serve its residential and business customers, it has not only reported 14 consecutive quarterly net losses but had to shoulder a tough economic slowdown.