Former Federal Communications Commission chairman Ajit Pai has joined Searchlight Capital as a partner, the investment firm said Monday.

Pai led the FCC as chairman from 2017 to 2020 under then President Donald Trump administration and first joined the Commission in 2012 after being appointed by then President Barack Obama. Prior to his FCC appointment, Pai served in various positions at the U.S. Department of Justice and the U.S. Senate, was a partner at the law firm of Jenner & Block and worked as in-house counsel at Verizon Communications. At Searchlight, he will focus on the company’s investments in the technology, media and telecommunications sectors.

During his tenure as chairman of the FCC, Pai helped advance major initiatives in 5G and other wireless technologies, led programs to help close the digital divide, promote innovation, protect consumers, public safety, and national security, and helped make the agency more open, transparent, and diverse. 

“TMT has always been a core focus at Searchlight and in recent years we have seen the opportunities in these sectors grow, a trend accelerated by the COVID-19 pandemic,” Searchlight founding partner Eric Zinterhofer said in a press release. “Given our strong presence in this space and Ajit’s distinguished career in the industry, we are excited to welcome him as our newest partner. His outstanding accomplishments at the FCC had a material impact on the broadband, wireless, and broadcast sectors, and his deep knowledge will be invaluable in accelerating our efforts in TMT and digital infrastructure.”

Searchlight is a global private investment firm with more than $8 billion in assets under management, with offices in New York, London, and Toronto and currently has holdings in Liberty Latin America, Univision Communications, Hemisphere Media Group, Ziply Fiber and others.

“I am excited to join the Searchlight team and help build on the firm’s demonstrated success in the technology media, and telecommunications sectors, especially with respect to digital infrastructure—an area that is essential to consumers and businesses in the United States and around the world,” Pai said in a press release. “Searchlight’s flexible investment strategy and partnership-driven approach have distinguished it from its peers, allowing the firm to capitalize on opportunities that provide value for its clients and the companies it invests in. I look forward to joining Eric, Erol, and Oliver, and contributing to the firm’s continued investment efforts.”

Searchlight Capital Partners and Wade Davis’ ForgeLight LLC said they completed their acquisition of a controlling 64% stake in Univision Holding Inc.

Financial terms were not disclosed, but the Wall Street Journal reported that the companies paid $526 million and assumed the company’s debt.

Also Read: FCC Approves Univision Sale to SearchLight

Davis, a former CFO for Viacom, has become CEO of Univision, succeeding Vince Sadusky.

Televisa said it will maintain its 36% ownership in Univision and convert warrants it holds into common stock. Television will also continue to be a major supplier of programming to Univision.

“I am honored to be partnering with Searchlight and Televisa to begin this exciting new era for Univision,” said Davis.

Also Read: New Directors Join Univision Board Ahead of Takeover

“Televisa’s strategic insight and global content leadership, coupled with Searchlight’s tremendous experience as a long-term media investor, will help us fully realize Univision’s potential as the leading Hispanic content company in the United States. Univision’s recognized and trusted brand, its consistent performance, and its leadership serving an important and growing consumer audience give us an unmatched opportunity to achieve even greater success,” Davis said.

Univision was the dominant Spanish-language television company for years.
After going private in a  $13 billion deal led by Haim Saban in 2007, Univision was saddled by billions in debt.

Comcast’s Telemundo has turned the Spanish-language market into a horse race in recent years by poaching rights to big sports events including the World Cup and offering more current primetime programming versus Univision’s more traditional telenovelas.

“We are excited to be part of this new phase of Univision. Wade’s leadership and Searchlight’s support are the catalysts that Univision needs to solidify its position as the leading Spanish-language media organization in the United States in light of the rapid changes that the industry is facing,” said Bernardo Gomez and Alfonso de Angoitia, co-CEOs of Televisa.  

“We are looking forward to an even closer collaboration with Univision to help it implement the many transformational initiatives that Wade has set out to achieve. We would also like to thank Haim Saban for his leadership and dedication to Univision all these years,” the Televisa executives said.

The FCC's Media Bureau has approved the Univision Holdings sale of majority ownership interest in the Spanish-language media company and its broadcast properties (65 TV stations and 58 radio stations) to investment firms Searchlight Capital Partners, LP, and ForgeLight LLC.

The bureau's approval is conditioned on the sale of three Puerto Rico television stations -- WLII-DT and two satellite stations, WSUR-DT and WOLE-DT -- to comply with FCC local ownership rules.

Also Read: FCC Allows Univision to Boost Foreign Ownership

The FCC will allow Univision to continue to operate WFTY-TV in Smithtown, N.Y., as a satellite of WFUT-TV, Newark, N.J., pursuant to an exception from multiple ownership rules that could otherwise prevent the combo.

The FCC is also granting Univision's petition for a declaratory ruling that the resulting company be allowed to exceed the 25% cap on foreign ownership, conditioned on compliance with the Justice Department's letter regarding national security and law enforcement issues.

"We find that it would not be in the public interest to prohibit the aggregate foreign equity and voting interest in Univision to exceed 25% and to increase the interest up to and including 100% voting and equity," the FCC said.

Grupo Televisa, through Multimedia Telecom, will retain its 36% stake in Univision, with SearchLight and ForgeLight buying the other 64% from investor groups Madison Dearborn Partners, Providence Equity Partners, TPG, Thomas H. Lee Partners and Saban Capital Group. Via a subscription agreement, Liberty Global also winds up with an 11.6% stake.

While Univision has some license renewals pending, the FCC said there were no outstanding qualification issues that would stand in the way of approving the deal.

In 2013, the FCC lifted its ban on foreign ownership above 25%. Such ownership can now be as much as 100%, so long as it is found, as reviewed on a case-by-case basis, to be in the public interest. The FCC concluded that was the case with Univision.

"We find that that the record presents no substantial and material question of fact as to whether the transaction serves the public interest," the bureau said, adding: "We next find that approval of the proposed transfer of control would be in the public interest and grant the Applications -- including the request for a continuing
satellite exception -- conditioned upon divestiture of overlap stations in Puerto Rico."

About seven months after putting itself on the block, Univision Holdings, parent of Univision Communications, said Tuesday that a group including private investment firm Searchlight Capital Partners and operating and investment company ForgeLight, headed by formerViacom chief financial officer Wade Davis, have agreed to purchase a majority interest in the Spanish-language broadcaster.

Terms of the deal were not disclosed, but previous reports speculated that the group would pay about $800 million for the majority stake, valuing Univision at under $10 billion. 

According to Univision, Spanish-language programmer Televisa Communications will retain its 36% interest in Univision, with the private equity buyers purchasing a 64% interest in the broadcaster from Madison Dearborn Partners, Providence Equity Partners, TPG, Thomas H. Lee Partners and Saban Capital Group. Davis, founder of ForgeLight, will become CEO of Univision after the deal closes, expected later this year.

As part of the agreement, Televisa’s programming deal with Univision will remain intact and will not expire unless Televisa voluntarily sells down a portion of its ownership stake, at which point the programming deal would remain in effect for 7.5 years.

The deal ends what has been more than a decade-long odyssey for Univision, which went private in 2006 in a leveraged buyout valued at about $13.7 billion.

Univision reportedly turned down an offer in 2017 from Liberty Media’s John Malone that would have valued the company at $13.5-to-$15 billion. In March 2018 the company withdrew a planned initial public offering because of what it said at the time were unfavorable market forces.  That IPO was expected to raise about $1 billion and would have valued the company at about $20 billion.

The withdrawal of the IPO touched off a series of events at the Spanish-language broadcaster, starting with the resignation of CEO Randy Falco and CFO Francisco Lopez-Balboa in March of that year. In the following months, several top executives, including former chief revenue officer Tonia O’Connor and chief content officer Isaac Lee, left the company for other opportunities. Univision shed some assets -- it sold its online unit Gizmodo Group to Great Hill Partners in April -- and endured some layoffs in July 2018.

In May 2018, Univision hired former Media General chief Vincent Sadusky as its CEO,  and the company has enjoyed ratings growth and successfully weathered a nine-month blackout to Dish Network customers last year. In a press release, Sadusky said Univision is a “re-energized and refocused company.”

“Both Searchlight and Wade are wholly supportive of Univision’s core mission to entertain, inform and empower Hispanic America and fully embrace the commitment and special bond we have with our audience,” Sadusky said in the press release. “Our talented operating team has transformed Univision to be strategically, operationally and financially stronger than it has been in years. We have made important moves—strengthened programming, secured many major distribution deals, closed our strongest Upfront in four years, divested non-core assets, and enhanced our news, sports, local and digital offerings. Our partnership with Televisa has never been stronger and continues to create an unstoppable, world-class content machine, as evidenced by Univision being one of only two broadcast groups to grow viewership this season. ...I remain committed to leading the company and supporting a smooth and successful transition over the coming months to ensure Univision is best positioned for the future ahead.”

Univision hired Morgan Stanley, Moelis & Co. and LionTree Advisors in July to explore strategic alternatives, including a sale. The auction reportedly attracted interest from several potential buyers, including Spanish language programmer Hemisphere Communications and Los Angeles based fund Platinum Equity. According to Bloomberg News, Hemisphere dropped out of the running in January. 

Searchlight Capital also has some experience in the TV business. Its founder Eric Zinterhofer was chairman of Charter Communications from 2009 to 2016. Prior to forming Searchlight in 2010, Zinterhofer was a partner at Apollo Global Management, Charter Communications’ largest bondholder when it as winding through bankruptcy in 2009. Apollo swapped that debt for equity in Charter and later sold that stake to cable legend John Malone’s Liberty Media in 2013. 

“Univision has a proven track record of success in reaching and serving the U.S. Hispanic community, who represent 1 in 5 Americans and growing," Zinterhofer said in a press release. "Most recently, Univision and its talented employees have made great strides under the leadership of Vince Sadusky and the stewardship of chairman Haim Saban and the full Sponsor Group. The strong support of Televisa, a premier content producer in the Spanish speaking world, and Wade Davis, a proven executive in areas which include advanced advertising and digital distribution, further enhances our confidence in Univision’s bright future.”

Davis thanked Univision's ownership group for steering the company along its current path, adding that he sees continued growth ahead.

"I am proud to partner with Searchlight and Televisa to lead Univision at such an exciting point in its history," Davis said in a press release. "Univision’s leadership and connection with one of the most important audiences in the U.S. today creates an amazing platform to drive innovation, build market-defining content and create an even deeper relationship with its audience. Vince and the entire Univision team have done an outstanding job of refocusing the company over the past 18 months, which has further enhanced the company’s position as a market leader in Spanish-language media and created this incredible opportunity going forward.”

Morgan Stanley, LionTree Advisors and Moelis & Co. are acting as financial advisors to Univision, and Cravath, Swaine & Moore, Covington & Burling and Sidley Austin are serving as legal counsel to Univision.

BofA Securities is serving as the financial advisor to Searchlight, Paul Weiss Rifkin Wharton & Garrison is acting as its legal counsel.

Guggenheim Securities is serving as financial advisor to ForgeLight, and Willkie Farr & Gallagher and Proskauer Rose are acting as its legal counsel.

Goldman Sachs is serving as financial adviser to Searchlight and ForgeLight as a group.

Allen & Co. is acting as the financial advisor to Televisa, and Wachtell, Lipton, Rosen & Katz and Pillsbury Winthrop Shaw Pittman are serving as its legal counsel.

Liberty Global and Searchlight Capital have paired up to acquire Choice Cable TV, the second largest cable operator in Puerto Rico, in a deal valued at about $272.5 million.

After the deal closes, Choice will be combined with LGI's Liberty Cablevision, the largest cable operator on the island. Liberty Global will own 60% of the combined operation while Searchlight, headed by Charter Communications chairman Eric Zinterhofer, will own 40% of the company.

According to Liberty Global, Choice Cable passes about 345,000 homes and has about 154,000 revenue generating units. The combined companies will reach about 80% of the cable market in Puerto Rico, have revenue of more than $380 million and serve about 700,000 RGUs. It also will be the first new asset in Liberty Global's planned tracking stock, Liberty Latin American and Caribbean Group (LiLAC). That tracker is expected to debut early next year.

The Choice Cable transaction will build upon our 2012 acquisition of OneLink and will complete cable consolidation on the island of Puerto Rico. Going forward, our market-leading bundles and commitment to network investment and innovation will meaningfully enhance the products and services available to Choice customers," said Liberty Global CEO Mike Fries in a statement.

Zinterhofer , a former senior partner at Apollo Management, was named Charter chairman in 2009, shortly after the company emerged from bankruptcy protection. He helped form Searchlight with several former executives from Apollo, KKR and the Ontario Teachers’ Pension Plan in 20xx. Searchlight has been an active investor in the cable industry – on Dec. 4 it invested about $75 million in Alaskan cable and telecom service provider GCI.

Liberty Global began beefing up its presence in Puerto Rico in 2012 with the purchase of One Link Communications from private equity firms MidOcean and Crestview Partners. Liberty Global combined OneLink with its existing operation there – Liberty Cablevision and Searchlight was in on that deal, ending up with 40% of the combined company.

"We are excited about the opportunity to bring next-generation video capability and enhanced broadband services to Choice’s customers," Zinterhofer said in a statement. "Furthermore, through the creation of an island-wide cable operator, there are significant opportunities to drive scale benefits and develop incremental residential and commercial business opportunities in Puerto Rico.”

This transaction values Choice Cable at an enterprise value before transaction costs of about $272.5 million, or about 6.1 times Choice’s 2015 estimated operating cash flow.

The purchase price is expected to be funded mainly through incremental debt borrowings at the combined Puerto Rican business. The transaction is subject to customary closing conditions, including regulatory approvals, and is expected to close in the first half of 2015. LionTree Advisors acted as financial advisor in the transaction.