Falconhead Would Net 5x Return On Sale Of Maritime Telecom Co.

By Sasha Dai, Dow Jones LBO Wire

4/7/2005 - Perseus LLC is close to acquiring Maritime Telecommunications Network Inc., a provider of communications services on cruise ships, for roughly $110 million, people involved in the transaction said.

Perseus, Washington, is acquiring the company, known as MTN, from Falconhead Capital and Natural Gas Partners, the sources said. The parties are expected to announce the deal as early as today.

Perseus is financing the transaction in part with borrowings from $81 million in credit facilities that MTN is raising from Credit Suisse First Boston. The facilities consist of a second-lien tranche of $28 million and first-lien facilities that total $53 million, the sources said.

Falconhead, New York, which owns more than 80%of MTN, stands to realize an overall cash-on-cash return of five times over a two-year holding period, according to the sources. The return includes $11.2 million - which represents 80% of Falconhead's equity investment - received in a 2004 recapitalization. The recap was financed by Bank of America, the lender that helped fund MTN's acquisition a year earlier.

Falconhead, together with Natural Gas Partners, Irving, Texas, acquired MTN from American Tower Corp. for $30 million in 2003. Falconhead put in about $14 million of equity, according to previous LBO Wire reports.

MTN formed a joint venture with AT&T Wireless - now part of Cingular Wireless - last year to provide passengers on cruise ships with cell phone services. The company also provides ship-to-shore communications services to oil tankers and platforms.

Falconhead is currently deploying its debut fund, Sports Capital Partners LP, which raised $214 million in 1999.

Perseus and its affiliates manage six investment funds with a total commitment of more than $2 billion, the firm said on its Web site.

Reach Falconhead at 212-634-3304; Natural Gas Partners at 972-432-1440; and Perseus at 202-452-0101.


Contacts: Roy Winnick, Kekst and Company, 212-521-4842 or 4802 

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