Altice on Wednesday entered the U.S. cable market by agreeing to acquire Suddenlink in a deal that values the regional player at US$9.1 billion.
With around 1.5 million residential customers and 90,000 business customers, Suddenlink is the seventh-largest U.S. cableco by subscribers. It operates in Arizona, Arkansas, Louisiana, Texas, and West Virginia.
Last year it generated $2.3 billion in revenue and more than $900 million in EBITDA. In the first quarter of 2015, Suddenlink added a record 24,600 new customers, and generated revenue of $588.3 million, up 2.2% on a year earlier.
In a statement, Altice said Suddenlink is an excellent fit for the French cable group.
"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 U.S. market," said Dexter Goei, CEO of Altice, in a statement.
"Our investment in Suddenlink, our first in the cable sector in the U.S., opens an attractive industrial and strategic avenue for Altice in the U.S., one of the largest and fastest growing communications markets in the world," he said.
The deal will see Altice take a 70% stake in Suddenlink from current shareholders BC Partners, CPP Investment Board, and Suddenlink’s management. BC Partners and CPP Investment Board will retain a 30% stake in the company. In all, the deal values Suddenlink at $9.1 billion.
"This acquisition is a testament to the consistently str ong operating and financial results we’ve achieved," said Suddenlink CEO Jerry Kent, in a statement.
"The backing of Altice will better position the company to gain critical scale as a major consolidator in the U.S. cable industry," he said.
The transaction will be funded with $6.7 billion worth of new and existing debt at Suddenlink, $1.2 billion in cash from Altice, and a $500 million vendor loan note from BC Partners and CPP Investment Board. The remainder will consist of rolled over equity held by BC Partners and CPP Investment.
"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," Goei said.
The deal is expected to close in the fourth quarter of 2015, subject to regulatory approval, at which point Suddenlink’s Kent will step down to focus on other business interests.
