News release from Altice Group:
Altice (Euronext: ATC) announces today that it has signed a definitive agreement to acquire 70% of the share capital 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 Suddenlink.
Suddenlink is the 7th largest US cable operator with 1.5 million residential and 90,000 business customers. With operations primarily focused in Texas, West Virginia, Louisiana, Arkansas and Arizona, Suddenlink is present in attractive growth markets for both residential and business services. In 2014, Suddenlink generated $2.3 billion in revenue and over $900 million in EBITDA with a balanced revenue mix between
residential video, broadband, telephony and business services. With a well invested, leading broadband network across its footprint, Suddenlink has a strong operational and financial growth track record. Suddenlink’s focus on service, innovation and investments provide a strong basis for extending its market leadership and growth momentum.
Suddenlink represents an excellent fit for the Altice Group and will benefit from the operational expertise, scale and investment support that are at the core of the Altice business model.
With this acquisition, the Altice Group enters the large and attractive US cable market and takes a further step in diversifying and balancing its portfolio of high-quality businesses.
Transaction details
The acquisition by Altice values Suddenlink at an enterprise value of $9.1 billion and values Suddenlink at 7.6x synergy-adjusted EBITDA (7.3x based on a tax-adjusted enterprise value based on estimated run-rate operating expenditures related synergies of $215 million).
The transaction is to be financed with $6.7 billion of new and existing debt at Suddenlink, a $500 million vendor loan note from BC Partners and CPP Investment Board, $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.
The transaction is expected to close in the fourth quarter of 2015 once applicable regulatory approvals have been obtained.
JP Morgan, PJT Partners and BNP Paribas acted as financial advisors to Altice. Franklin, Covington, Mayer Brown and Ropes & Gray acted as legal advisors to Altice.
Dexter Goei, CEO of Altice, declared: “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. 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.”
Suddenlink Chairman and CEO Jerry Kent made the following statement today, regarding the announcement that Altice S.A. has agreed to acquire Cequel Corporation, which does business as Suddenlink:
“I’m very proud of the Suddenlink team and our accomplishments over the last 12 years. This acquisition is a testament to the consistently strong operating and financial results we’ve achieved.
“While our strong performance has afforded Suddenlink ready access to growth capital, the backing of Altice will better position the company to gain critical scale as a major consolidator in the U.S. cable industry.
“For my part, after the acquisition is completed, I’ll continue to focus on other businesses, through my investment and management company, Cequel III. Throughout my entrepreneurial career, I’ve been excited and energized by seeking new opportunities and companies, and I look forward to the next chapter.”