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EquityCo: Cable TV acquisition nets 70% internal rate of return

Case introduction

Situation

EquityCo is a large private equity firm that was considering the acquisition of TideTV, a regional cable company.

Complication

EquityCo wanted to use TideTV as a springboard to diversify beyond cable television into the long-distance telephone market—a promising growth opportunity.

Key question

Would the acquisition of TideTV present the opportunities EquityCo was looking for in the long-distance telephone market?