Charter Communications has closed its US$1.625bn acquisition of Optimum West, also known as Bresnan Broadband Holdings, from fellow US cableco Cablevision.
Nasdaq-listed Charter funded the purchase using US$1.5bn committed bank financing secured in…
Charter Communications has closed its US$1.625bn acquisition of Optimum West, also known as Bresnan Broadband Holdings, from fellow US cableco Cablevision.
Nasdaq-listed Charter funded the purchase using US$1.5bn committed bank financing secured in April – Credit Suisse was left-lead bookrunner and Goldman Sachs was joint bookrunner and joint lead arranger on that transaction.
The term loan E matures in 2020 and the pricing was set at LIBOR plus 225 basis points, with a 75 bps LIBOR floor. Charter also used cash on hand and its revolver to finance the buy.
The price represents a multiple of 8.9x Optimum West’s third quarter 2012 annualised adjusted EBITDA, the companies said when the transaction was first announced, and a purchase price multiple of less than 8x Charter’s estimate of Optimum West’s first year adjusted EBITDA under Charter.
In February Charter’s CFO Christopher Winfrey said the multiple was attractive because of Optimum West’s “double digit growth profile”. Charter said it expected to hit 5x leverage, but that it will continue to target 4x to 4.5x over time.
The acquisition gives Charter operating systems across four states that serve 375,000 customers and pass 660,000 homes.
Credit Suisse and Goldman Sachs acted as financial advisers to Charter, and Sherman & Howard served as legal counsel.
Citi and JP Morgan acted as co-lead financial advisors to Cablevision, and BofA Merrill Lynch and Guggenheim Securities provided financial advice to the company. Sullivan & Cromwell served as legal counsel to Cablevision.
Tom Rutledge, Charter president and CEO, commented: “These former Bresnan properties, which under Cablevision’s leadership became some of the fastest growing cable properties in the United States, are an ideal fit for Charter, and we anticipate a smooth and efficient integration process.”
John Malone’s Liberty Media recently acquired a 27% stake in Charter and has talked up the possibility of consolidation in the US cable sector. It has been linked with a possible acquisition of Time Warner Cable. Charter recorded US$7.5bn revenue for 2012.
