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Entries in Suddenlink (16)

Wednesday
Jun032015
DateWednesday, June 3, 2015 at 10:12PM

Altice Enters U.S. Cable Market with Suddenlink Deal

French telecom firm Altice announced on Monday, May 20th that it had agreed to buy a 70 percent stake of Suddenlink Communications valuing the company at $9.1b.  The deal marks the first purchase of a U.S. based cable property for the acquisitive Altice, a move spearheaded by founder and cable veteran Patrick Drahi.  Through the deal, Altice acquires a controlling stake in the seventh largest cable provider in the U.S. with operations largely concentrated in the south and midwest.

Valuation Analysis and Deal Metrics

Transaction Facts

  • Altice to acquire 70 percent stake of Suddenlink from BC Partners, CPP Investment Board and Suddenlink management valuing the company at $9.1b 
  • Existing shareholders retain 30 percent ownership (had acquired Suddenlink for $6.6b in 2012)
  • Deal financed with $5.10b in existing debt, $1.76b in new debt issued, a $500k vendor loan from BC Partners and CPP Investment Board and $1.2b in cash from Altice
  • $215m in annual synergies anticipated  
  • Total leverage including full synergies of 6.1x 2014 EBITDA
  • Expected close 4Q15

Strategic Considerations

  • Grants Altice entry into the U.S. cable market, laying the groundwork for future cable acquisitions and increased scale in the states   
  • Enhances geographic diversity of Altice’s revenue mix: France 64%; Portugal 14%; US 12%; Israel 5% and Other 5%
  • Balanced customer and revenue mix with 1.13m cable, 1.25m broadband and 600k telephone subs
  • Investments in fiber network over last several years provides Suddenlink with strong in-footprint competitive positioning to improve penetration, reduce churn and increase bundling

JSICA’s Take

Altice’s deal for Suddenlink continues the strong momentum of large-scale M&A in the U.S. cable market.  At 3.9x revenue and 10.0x trailing OIBDA, Altice appears to have paid a good premium for its entrance into the U.S. cable scene.  While Altice touts the potential for synergies at Suddenlink, its lack of existing network infrastructure and staff in the U.S. will make realizing these cost savings more difficult.  Drahi has been vocal that Altice is on the hunt for bigger deals in the U.S. that would grant it the scale to deliver meaningful cost savings.  Charter’s take out of Time Warner may have erased one target off of Altice’s wish list, but we do not expect Altice to be away from the deal table for long.  Cablevision and Verizon’s wireline ops have been rumored to be in the French telecom’s scope.  

AuthorAdam Brissette | Comments Off | | | Print ArticlePrint Article
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Wednesday
Feb012012
DateWednesday, February 1, 2012 at 8:31AM

Suddenlink Seeks to Refinance its $2.5 Billion Credit Facility

Source: Sunddenlink Press Release

Cequel Communications Holdings I, LLC (dba Suddenlink) announced that its subsidiary, Cequel Communications, LLC, intends to begin a process to refinance its existing $2.525 billion credit facility with a new $2.7 billion credit facility.

The New Credit Facility is expected to consist of a $500 million revolver and a $2.2 billion term loan B. If the refinancing of the Existing Credit Facility is successful, the company expects to use the proceeds from the New Credit Facility to repay in full and terminate the Existing Credit Facility and to make distributions to Cequel Communications Holdings, LLC, Cequel`s parent company, of $370 million in March 2012 and up to an additional $70 million in May 2012. Cequel Holdings is expected to use such distributions to repay a portion of the capital contributions made by holders of common units of Cequel Holdings and to make certain payments to holders of options and restricted units of Cequel Holdings.

Cequel has no current plans for any further distributions. In any event, Cequel will not make any such additional distributions prior to April 1, 2013. There is no guarantee that any such refinancing transactions will be consummated on terms acceptable to the company or at all.

In connection with the refinancing, Cequel is disclosing to potential lenders under the New Credit Facility the following preliminary information with respect to its results for the year ended December 31, 2011. The Preliminary Financial Information below represents Cequel`s preliminary estimates and is based on information available to its management team as of the date of this release.

The Preliminary Financial Information as described below is presented both on an actual basis and on a pro forma basis to include the acquisition of all of the issued and outstanding capital stock of NPG Cable, Inc., Mercury Voice and Data Company, and NPG Digital Phone, Inc., which occurred on April 1, 2011, as well as other previously disclosed small acquisitions and divestitures, as if those transactions had been consummated on January 1, 2010.

On a pro forma basis for the year ended December 31, 2011, revenue is expected to be $1,929.9 million, a 7.1% increase over revenue for the prior year. Adjusted EBITDA is expected to be between $715.0 and $718.0 million, an expected increase of 8.6% to 9.1% over Adjusted EBITDA for the prior year. For the year ended December 31, 2011, Cequel added approximately 151,300 revenue generating units, an increase of approximately 4.6%. Pro Forma Adjusted EBITDA, as defined in our credit facility and bond indenture, is expected to be between $723.0 million and $726.0 million for the year ended December 31, 2011.

AuthorDeborah Rand | Comments Off | | | Print ArticlePrint Article
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Thursday
Nov032011
DateThursday, November 3, 2011 at 10:42AM

Suddenlink Reports Third Quarter 2011 Results

Source: Suddenlink Press Release

Cequel Communications Holdings I, LLC ("Cequel," and together with its subsidiaries, the "Company" or "Suddenlink") today reported financial and operating results for the three and nine months ended September 30, 2011.

Third quarter 2011 revenues rose 7.3%, largely attributable to increases in residential high-speed Internet, telephone and advanced digital video revenues, and growth in revenues from our commercial and carrier businesses. Adjusted EBITDA for the third quarter 2011 was $177.7 million, an increase of 9.2% from the same quarter last year, resulting in an Adjusted EBITDA margin of 36.8%. Excluding the impact of the non-recurring expenses associated with Hurricane Irene and the acquisition and integration of NPG Cable, Adjusted EBITDA for the third quarter 2011 would have increased 9.8% from the same quarter last year.

Income from operations for the third quarter 2011 was $72.4 million, an increase of 21.5%, compared to $59.6 million for the third quarter 2010 due to revenue increases year-over-year outpacing operating, selling and administrative, and depreciation and amortization expense increases. Net loss was approximately $5.2 million for the third quarter 2011, compared to a net loss of $5.1 million for the third quarter 2010.

AuthorDeborah Rand | CommentPost a Comment | | | Print ArticlePrint Article
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Sunday
Aug142011
DateSunday, August 14, 2011 at 8:42AM

Suddenlink Reports Second Quarter 2011 Results

Source: Suddenlink Press Release

Cequel Communications Holdings I, LLC, dba Suddenlink, reported financial and operating results for the three and six months ended June 30, 2011. Second quarter 2011 revenues rose 7.2%, largely attributable to the increase in the number of new telephone, high-speed Internet and digital video customers, an increase in the penetration of existing customers for these services, video and high-speed Internet rate increases, and incremental video revenues from video on demand, high definition television and digital video recorder services as more customers purchased advanced video services from us during the trailing twelve months. Offsetting this growth, in part, was a decrease due to the impact of bundling and promotional discounts, and a decline in basic video customers, including seasonal losses in the recently acquired NPG Cable properties, and our limited marketing in those systems until the integration was complete in July 2011.

Income from operations for the second quarter 2011 was $73.0 million, an increase of 11.8%, compared to $65.3 million for the second quarter 2010. Net loss was approximately $42,000 for the second quarter 2011, compared to a net loss of $38.3 million for the second quarter 2010. The second quarter of 2010 included $34.1 million of losses from interest rate swap terminations and debt extinguishment.

AuthorDeborah Rand | CommentPost a Comment | | | Print ArticlePrint Article
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Monday
Jul182011
DateMonday, July 18, 2011 at 5:41PM

CATV Broadband and Voice Penetration Improves

Source: Phone Numbers

At a time when video penetration has dropped for cablecos, cable voice and broadband subscriptions are on the rise. Cable providers delivered broadband services to nearly 80% of their basic cable subscribers in 1Q11, and companies across the board improved voice and broadband penetration of homes passed.

Get the numbers here.

AuthorAdam Brissette | Comments Off | | | Print ArticlePrint Article
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