US cableco Cequel Communications Holdings, which operates as Suddenlink Communications, has been sold for US$2.5bn. The buyers – PE firm BC Partners, Canadian pension fund CPP Investment Board (CPPIB), and members of Suddenlink’s management team led…
US cableco Cequel Communications Holdings, which operates as Suddenlink Communications, has been sold for US$2.5bn. The buyers – PE firm BC Partners, Canadian pension fund CPP Investment Board (CPPIB), and members of Suddenlink’s management team led by CEO Jerry Kent – will also take on debt amounting to US$4.09bn
The new owners will invest US$1.99bn in equity plus US$500m in incremental debt. This will be used to acquire the equity stakes of investors led by Goldman Sachs Capital Partners, and including Quadrangle and Oaktree Capital Management.
The enterprise value of US$6.6bn represents a multiple of approximately 8.6 times Suddenlink’s first quarter annualised EBITDA before non-recurring expenses, the company said in a statement.
The US$500m of incremental debt comes in the form of a senior unsecured bridge loans agreed with Credit Suisse. The proceeds will be used to fund a portion of the purchase price.
Suddenlink will continue to be managed by Cequel and the transaction is expected to close in Q4, subject to regulatory approvals.
“This agreement will allow us to continue to invest in our infrastructure, new technology, and most importantly, our people,” said Suddenlink’s CEO Jerry Kent.
“Cable is an industry we know well in both Europe and the United States, and epitomises the defensive growth characteristics we typically seek in an investment,” said BC partners managing partner Raymond Svider.
Suddenlink were advised by LionTree Advisors, a division of EM Securities, and Goldman Sachs. Paul Hastings and Seyfarth Shaw acted as legal advisors.
BC Partners and CPPIB were advised on financials by Credit Suisse, while Latham & Watkins and Wachtell, Lipton, Rosen & Katz acted as legal advisors. CPPIB was also separately advised by Torys.
For existing equity holders Fried, Frank, Harris, Shriver & Jacobson acted as legal advisor.
