Falconhead Capital investors cheered the recent recapitalization of Maritime Telecommunications Network (MTN), a deal that returned roughly 80% of Falconhead’s invested capital back to the limited partners.
Bank of America is financing the recap, and has agreed to provide a $15 million term loan and a $5 million revolver. Falconhead originally acquired the business for around $30 million last year, with an equity contribution of $14 million. Of the $20 million included in the refinancing package, $12 million will go to the investors, with the balance going back into the company as growth capital. The new arrangement will also allow MTN to retire all of its acquisition-related debt, which was also provided by Bank of America.
Maritime Telecommunications Network, headquartered in Miramar, Fla., provides satellite-based voice, data, Internet and video communications services to the cruise ship and offshore oil and gas industries. The business was acquired from American Tower in February of last year.
David Moross, the chairman and chief executive at Falconhead, said, “When we acquired the business, we saw a company that had an 85% market share in the cruise line industry. The management also had experience in the military and oil and gas areas as well, so once we took over the business, we encouraged them to really go after those spaces.”
In the year that Falconhead has owned MTN, the business has more than doubled its EBITDA, according to Moross. The company has pursued a number of initiatives to expand, and most recently sealed a joint venture with AT&T Wireless that will enable the use of cell phones while at sea. Additionally, the company was tapped to design and manufacture a truck-based mobile satellite transmission platform for NBC, which was used by the late war correspondent David Bloom to provide live coverage from the front lines of the war in Iraq.
Going forward, Falconhead expects to eventually exit the company through a sale to a strategic buyer, although Moross could not give a time frame for when the firm will put the company up for auction.
Falconhead, which is backed by sports management firm IMG, used its Sports Capital Partners LP fund for the deal. The $214 million fund is now more than 75% invested.
Sponsor: Falconhead Capital
Target: Maritime Telecommunications Network
Debt Providers: Bank of America
Legal Counsel: Kirkland & Ellis