Colony Capital’s acquisition of LodgeNet is expected to close at the end of the month, and LodgeNet will exit bankruptcy protection and begin its restructuring plan under the control of the private equity firm, which is funneling $60 million into the recapitalization.
As part if is restructuring process, LodgeNet has announced an expanded strategic relationship with DirecTV, one of LodgeNet’s largest unsecured creditors. The partnership will provide LodgeNet’s hospitality and healthcare customers with upgraded products and services, as well as a financing program to facilitate upgrades to HDTV service at little or no out-of-pocket capital expense to its customers.
Customers can also expect new a la carte programming options, including DIRECTV’s exclusive NFL Sunday Ticket, as well as other unique revenue-generating and connectivity options. LodgeNet and DirecTV will also work together to develop an open architecture technology platform. The partnership will also provide a new user interface to LodgeNet customers—one that is more consistent with that offered by DirecTV to its residential customers. Customer support will also be provided by DirecTV.
LodgeNet filed for Chapter 11 bankruptcy on January 27 and was recently cleared to borrow on a $20 million bankruptcy-exit loan from Bank of America. The company’s restructuring plan was approved by 89 percent of its lenders at a hearing last Thursday. As part of the plan, Colonly Capital will receive new common stock representing 100 percent ownership of LodgeNet in exchange for the $60 million.