Deal-hungry Altice, which has built up a significant European cable-to-mobile business, made its second major foray into the US with an agreement to acquire Cablevision Systems for $17.7 billion including debt.
Combining Cablevision with Suddenlink, recently acquired by Altice for $9.1 billion, would make the fourth largest cable operator in the US.
Cablevision boasts a 65 per cent take up among its subscribers of triple play services, combining fixed telephony, TV and broadband. In markets such as France and Portugal, Altice has added mobile telephony to the mix. Interestingly, in an interview with the Wall Street Journal this summer, Altice’s founder, Patrick Drahi, said: “My vision is to do the same in the US, but bigger”, referring to quadplay packages, although it is unclear so far how he plans to add mobile services in the States.
Earlier this summer Altice launched a failed takeover bid for Time Warner Cable.
The deal values Cablevision, which has a market value of $7.9 billion, at $17.7 billion including debt.
Altice intends to finance the acquisition with $14.5 billion of new and existing debt at Cablevision, as well as $900 million in cash on hand at the cable operator, plus $3.3 billion of cash from Altice. Private equity firms BC Partners and CPP Investment Board have an option to buy up to 30 per cent of the equity of Cablevision.
Acquiring the US cable operator rebalances Altice’s revenue mix 70-30 in favour of fixed vs mobile, following previous purchases of France’s SFR and PT Portugal which had skewed it more towards the mobile business.
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