BC Partners, CPPIB to buy U.S. cable operator Suddenlink

Thu Jul 19, 2012 2:59am EDT
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By Euan Rocha

TORONTO (Reuters) - Private equity firm BC Partners and one of Canada's top pension funds are joining forces with the management of Suddenlink Communications to buy out the U.S. cable operator in a cash and debt deal worth roughly $2.5 billion.

BC Partners and the Canadian Pension Plan Investment Board said late on Wednesday they are teaming up with U.S. cable industry veteran Jerry Kent to buy Suddenlink from Goldman Sachs Capital Partners, Quadrangle and Oaktree Capital Management.

The Suddenlink deal is the latest in a string of deals in the cable sector both within and outside the United States.

The industry has seen some of the largest buyouts of the last two years, as both sector incumbents and private equity firms have swooped in to acquire cable companies that offer the promise of revenue growth and steady cash flows.

In August last year, Time Warner Cable bought cable operator, Insight Communications from Carlyle Group for $3 billion to grow its reach in the U.S. Midwest.

Earlier on Wednesday, Cogeco Cable Inc, a Canadian company that serves mostly rural customers in the provinces of Ontario and Quebec, said it would pay $1.36 billion to buy U.S. cable operator Atlantic Broadband, in a move aimed at gaining a foothold in the larger U.S. market.

The Suddenlink deal includes a $1.99 billion equity portion, along with incremental debt of $500 million. Including existing debt, the deal pegs Suddenlink's enterprise value at $6.6 billion.

Suddenlink offers cable, Internet and telephone services to more than 1.4 million residential and commercial customers in Texas, West Virginia, North Carolina, Oklahoma, Arkansas and Louisiana. It is the seventh-largest U.S. cable operator with annual revenues of around $2 billion and 6,000 employees.   Continued...