Cable and telecom investor Altice, the majority owner of France’s Numericable-SFR, is moving into the US cable market with a US$9.1 billion (€8.1 billion) deal to acquire the country’s seventh largest operator, Suddenlink.
Altice will take a 70% majority stake in Suddenlink from existing shareholders BC Partners, CPP Investment Board and Suddenlink management. BC Partners and CPP Investment Board will retain a 30% stake in the operator.
Suddenlink has 1.5 million residential and 90,000 business customers, primarily in Texas, West Virginia, Louisiana, Arkansas and Arizona.
In 2014, Suddenlink generated US$2.3 billion in revenue and over US$900 million in EBITDA with a balanced revenue mix between residential video, broadband, telephony and business services, according to Altice.
The purchase price for Suddenlink represents a multiple of 7.6 times synergy-adjusted EBITDA. Altice will finance the deal via US$6.7 billion in new and existing debt at Suddenlink, a US$500 million vendor loan note from BC Partners and CPP Investment Board, and US$1.2 billion of cash from Altice, with the remainder representing the roll over by BC Partners and CPP Investment Board.
Debt issuance at Suddenlink will remain ring-fenced from the existing indentures currently in place within the Altice Group, and Suddenlink will hence not be restricted under such indentures, according to Altice.
The deal is expected to close in the fourth quarter of 2015, pending regulatory approval. JP Morgan, PJT Partners and BNP Paribas acted as financial advisors to Altice. Franklin, Covington, Mayer Brown and Ropes & Gray acted as legal advisors.
In addition to its holding in Numericable-SFR, Altice controls Israeli cable operator Hot and is currently in the process of acquiring Portugal Telecom’s domestic assets.
“We are very excited about the acquisition of Suddenlink and are highly committed to continue to improve network investment, customer offers and service innovation in the attractive US market,” said Dexter Goei, CEO of Altice.
“Our investment in Suddenlink, our first in the cable sector in the US, opens an attractive industrial and strategic avenue for Altice in the US, one of the largest and fastest growing communications markets in the world. We are looking forward to our partnership with BC Partners and CPP Investment Board and believe Suddenlink is a best in-class business that should be able to deliver profitability and cash flow levels in line with best-in-class European cable businesses.”
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19 June 2021 @ 12:34:00 UTC