AT&T Inc. and TPG Capital have closed their transaction establishing a new company named ‘DIRECTV’. This new company will own and operate the DirecTV, AT&T TV and U-verse video services previously owned and operated by AT&T. AT&T contributed its US video business unit to the new entity in exchange for preferred units as well as a 70% interest in the common units of DIRECTV.
The transaction – which was first announced in February this year – implies an enterprise value for the new company of USD16.25 billion. At closing, AT&T received USD7.1 billion in cash (USD7.6 billion net of approximately USD470 million cash on hand) and transferred approximately USD195 million of video business debt. TPG contributed approximately USD1.8 billion in cash to DIRECTV in exchange for preferred units and a 30% interest in common units of the new company.
DIRECTV had approximately 15.4 million pay-TV subscribers at the end of the second quarter of 2021.