Philip Falcone, former CEO of Harbinger Capital and bankrupt satellite-based network LightSquared, is back in the telecom arena again with HC2 Holdings, Inc.’s purchase of DTV America Corporation (DTVA) which currently owns and operates 52 LPTV stations in more than 40 U.S. cities.
Falcone, HC2’s Chairman, President and CEO, stated, “This investment is another meaningful addition to our dynamic and strategic portfolio of assets. DTVA is the largest broadcast distribution platform in the U.S., with valuable assets and substantial and growing market share among television households located in important geographies, and we believe is poised to capitalize on a number of compelling opportunities.”
if approved by the FCC, HC2 will own over 50% of the shares of the common stock of DTVA.
Falcone made $10 billion betting against the subprime mortgage market, and his next gamble was putting billions into LightSquared, but the company filed for bankruptcy after it was found that the network interfered with the nation’s GPS frequencies.
Then the Securities and Exchange Commission (SEC) filed a suit accusing him of fraud, alleging that he directed Harbinger to lend him $112 million to cover taxes that he owed. He settled with the FCC in 2013, accepting a five-year bar from managing outside capital.
Falcone, 54, joined HC2, established in 1994, in 2014. His new venture allows him to stay active since the SEC has permitted him to run a public company that buys whole businesses instead of managing a fund trading stocks and bonds.
The company also announced yesterday that it had closed on a private placement of $38 million in senior secured notes due 2019.
Headquartered in New York, HC2 is a publicly traded holding company, which seeks opportunities to acquire and grow businesses that can generate long-term sustainable free cash flow and attractive returns. It owns companies in construction, marine services, energy, telecommunications, life sciences, insurance and other industries.
Its top institutional holders are Jefferies Group Inc., Putnam Investments LLC and Blackrock Inc.
Since Falcone joined HC2, the company went from $547 million in revenue in 2014 to $1.5 billion in 2016. It’s losses also increase from $16 million to $105 million.
DTVA is a private company headquartered in Weston, Fla., with a portfolio of more than 450 LPTV licenses and construction permits as well as a distribution platform currently providing carriage for more than 30 television broadcast networks, including QVC, Accuweather, American Sports Network (Sinclair), GetTV (Sony), MyNet (Fox), Telemundo (NBC), CoziTV (NBC), NewsMax, Azteca, Estrella TV and Cheddar.