Diamond Castle in $230m TV company acquisition

The DLJ private equity spinout has acquired BlueStone Television from Providence Equity Partners as it looks to establish an acquisition platform in the industry.

Bonten Media Group, an affiliate of the New York-based private equity firm Diamond Castle Holdings, plans to acquire BlueStone TV Holdings, a subsidiary of Wichita, Kansas-based BlueStone Television, for $230 million (€179.4 million), Diamond Castle said in a statement. BlueStone Television is a portfolio company of Providence, Rhode Island-based private equity firm Providence Equity Partners. The transaction is expected to close in early 2007.

Randall Bongarten, a broadcast television veteran, will become BlueStone’s chief executive officer once the transaction is complete. In 2000, Bongarten became the president of Emmis Television, an affiliate of Emmis Communications, a company that owns and operates radio, television and magazine entities in the US.

“We expect the BlueStone stations to be the first of several acquisitions,” Bongarten said in the statement. “Bonten Media Group and our sponsor, Diamond Castle Holdings, maintain a strong belief in the future of television and the central role it will continue to play in America’s local communities.”

Founded in 2002 by veteran television executive Sandy DiPasquale and Providence Equity Partners, BlueStone owns and operates television stations with network affiliations in eight US markets, including cities in Tennessee, Virginia, North Carolina, California, Texas and Montana. Its affiliates include media giants ABC, NBC, FOX and Telemundo. Bonten Media Group will seek to acquire and operate more stations following the transaction, the statement said.

Larry Schloss, the former global head of Credit Suisse First Boston (CSFB) Private Equity and former chairman of DLJ Merchant Banking Partners, founded Diamond Castle in 2004 with four of DLJ’s former managing directors. The firm’s investments focus on the power, financial services, media and communications, healthcare and industrial sectors. Diamond Castle agreed to buy PRC, a customer relations management company, from business operator IAC/InteractiveCorp for an undisclosed amount earlier this month. That transaction was the fourth investment Diamond Castle made with its debut fund.