Altice partners BC Partners and Canada Pension Plan Investment Board have taken up the option to buy a 30% stake in the European telecoms group’s second agreed US investment, Cablevision Systems, for about US$1bn. The acquisition which, together with Altice’s Suddenlink buy will create the US’ fourth largest cableco, is now fully funded.
Altice (AMS:ATC) partners BC Partners and Canada Pension Plan Investment Board (CPPIB) have taken up the option to buy a 30% stake in the European telecoms group’s second agreed US investment, Cablevision Systems (NYSE:CVC), for about US$1bn.
The definitive agreement with funds controlled by the two investors follows Altice’s mid-September announcement that it had agreed to acquire Cablevision from the Dolan family in a deal valuing the target at US$17.7bn. At the time, it said BC Partners and CPPIB had the opportunity to buy a combined 30% stake.
Patrick Drahi’s Altice agreed to buy a 70% stake in Suddenlink, its first US cable target, in May from BC Partners, CPPIB and Suddenlink management for US$9.1bn.
London-based BC Partners and Toronto-based CPPIB agreed to retain the remaining 30% holding.
Both the Cablevision and Suddenlink acquisitions are subject to regulatory approvals.
Following its recent €1.61bn (US$1.8bn) capital increase and US$8.6bn debt issue, the Cablevision deal is now fully funded, Altice said, noting it expects it to close in the first half of 2016. According to data from S&P Capital IQ, the cash consideration due totals US$9.7bn.
Altice CEO Dexter Goei (pictured) said the company is “extremely pleased” the two partners have decided “to continue to accompany [it] in its long-term oriented growth and investment strategy in the US”.
CPPIB managing director and head of direct private equity Shane Feeney described the investment as an attractive opportunity to invest in a sector it knows well.
Meanwhile, BC Partners co-chairman and managing partner Raymond Svider said the company is “highly confident in Altice’s ability to further enhance network quality, increase customer satisfaction and meaningfully improve financial performance at Cablevision.”
Altice said its shareholder’s agreement with BC Partners and CPPIB for Cablevision has “similar terms” to the Suddenlink agreement.
In mid-October, Altice and Cablevision, the leading operator in the New York metropolitan area, filed a transfer application with the Federal Communications Commission (FCC), contending that their proposed deal poses no threat to competition, would reduce vertical integration and afford the target benefits of scale.
Together, Cablevision and Suddenlink would create the US’s fourth largest cableco with 4.6 million customers across 20 states.
