Altice is to enter the US market, having agreed a 70% purchase of cableco Suddenlink, a move widely expected to be a precursor to an acquisition of number two player TWC. The Luxembourg-based telecoms group announced today that its offer values…
Altice is to enter the US market, having agreed a 70% purchase of cableco Suddenlink, a move widely expected to be a precursor to an acquisition of number two player TWC.
The Luxembourg-based telecoms group announced today that its offer values Suddenlink at an enterprise value of US$9.1bn.
Altice has so far declined comment on a report that it held talks to buy TWC, whose megamerger with Comcast collapsed due to regulatory opposition. Such an offer would likely put it up against John Malone-owned Charter Communications.
The sellers are BC Partners, CPP Investment Board and Suddenlink management, with the former two retaining a 30% stake.
Altice said the Suddenlink deal values the company, which has 1.5 million residential and 90,000 business customers, at 7.6x synergy-adjusted EBITDA or 7.3x based on the tax-adjusted enterprise value. The former figure is based on a synergy estimate of US$215m.
Altice will finance the deal with US$6.7bn of new and existing debt at Suddenlink, a US$500m vendor loan note from BC Partners and CPP Investment Board, and US$1.2bn of its own cash. The remainder represents the rollover by BP Partners and CPP Investment Board.
The deal is expected to close in Q4, subject to regulatory approvals.
Altice’s financial advisers for the deal were JP Morgan, PJT Partners and BNP Paribas. Its legal advisers were Franklin, Covington, Mayer Brown and Ropes & Gray.
Altice CEO Dexter Goei, said: “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.”
Since listing on the NYSE in 2014, Altice has bought French cellco SFR via its local cable unit Numericable and Orange Dominicana in the Caribbean, and agreed to buy incumbent PT Portugal.
Suddenlink’s main markets are Texas, West Virginia, Louisiana, Arkansas and Arizona. Altice said it last year generated US$2.3bn in revenue and over US$900m in EBITDA.
It is currently present in France, Belgium, Luxembourg, Portugal and Switzerland, Israel and French overseas territories.
