The agreement, announced Wednesday evening, includes $1.985 billion of total equity to be invested by the group, plus incremental debt of $500 million, and the assumption of $4.094 billion of debt and other liabilities.
BC Partners, CPPIB and the Suddenlink management group expect to close the deal by the fourth quarter of 2012. They'll be looking to take over Cequel Communications Holdings LLC, which does business as Suddenlink Communications, a cable MSO with about 1.4 million subscribers in parts of Texas, West Virginia, North Carolina, Oklahoma, Arkansas and Louisiana. Suddenlink generated $1.96 billion in revenues for the 12 months ended March 31, 2012.
BC Partners, which manages a fund of about $15.5 billion, already owns Swedish MSO com hem AB and sold its stake in German MSO Unitymedia GmbH to Liberty Global Inc. (Nasdaq: LBTY) in 2009. Canada-based CPPIB invests funds not needed by the Canada Pension Plan, and claims to have about C$26.3 billion invested in private equities.
Why this matters
The proposed deal will keep the nation's seventh-largest cable operator private, and marks the latest in a string of M&A deals involving Tier 2/3 domestic MSOs.
Of recent note, WideOpenWest Holdings LLC (WOW) and Knology Inc. (Nasdaq: KNOL) just completed their $1.5 billion merger, and Cogeco Communications (Toronto: CCA) of Canada marked its entry to the U.S. this week via a $1.36 billion acquisition of Atlantic Broadband.
The bid for Suddenlink also comes on the heels of Project Imagine, a $350 million upgrade initiative that funded the operator's move to Docsis 3.0 and introduced an expanded menu of video-on-demand (VoD) capacity and high-definition channels.
- Suddenlink Loses $26.6M in Q1
- Suddenlink Unleashes 107-Meg Wideband Tier
- Whoa! WOW Buys Knology for $1.5B
- Liberty Splashes $5.2B on German Operator
— Jeff Baumgartner, Site Editor, Light Reading Cable