Investee Company – EON Communications Ltd (UK)
Investee Company Business Type – Provides broadband cable services
Type of Financing – Start up
Equity Providers – Madison Dearborn Partners, TD Capital Communications Partners, Incepta Partners, GE Capital Telecom
Equity Leader (Individual) – James Kirby, Madison Dearborn Partners
Debt Providers – TD Securities, Bank of Scotland
Debt Type – Senior debt
Debt Leader (Individual) – Stuart Gibson, Bank of Scotland
Equity Amount – £110 million
Total Deal Value – £265 million
Other Advisors – CEA International Ltd, Taylor Johnson & Garrett, Kirkland & Ellis
Comments – EON Communications, a start up broadband communications company, has announced an initial £265 million round of funding. Madison Dearborn Partners and TD Capital Communications Partners co-led the equity financing of £110 million. The new equity will be used to build a digital broadband communications network in South West Scotland and North West England, the largest remaining non-serviced domicile in the UK.
Madison Dearborn provided £57 million in equity and TD Capital provided £30 million, to which the other participants in the round, Incepta Partners and GE Capital Telecom contributed £13 million and £10 million, respectively. A syndicated debt facility of £155 million was arranged by TD securities and Bank of Scotland.
The company is led by CEO Ian Renshaw, former managing director of residential services for ComTel, the cable operator that was acquired by NTL Incorporated in 1998. Renshaw said: “EON will provide a real communications alternative to homes and businesses in a region which until now has suffered from a severe lack of choice – we will be the only operator in the area to offer such a comprehensive menu of broadband services.”
The bundled communications services that EON will provide includes digital interactive television, fixed line voice telephony, Internet access and high speed data services in the region. Using the company’s own hybrid-fibre-coax network, EON will be able to serve approximately 325,000 residential customers and 25,000 business customers with direct on-net connections.
After raising what EON believes to be one of the largest start up financings for a UK telecommunications company in 2001, the company is set to provide fixed line voice services, high-speed Internet access and broadband cable services to a section of customers within the next six months.