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Altice USA Taps Goldman Sachs to Assess Lightpath Unit – Report

Jeff Baumgartner
3/8/2019
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Altice USA has taken a step toward determining the fate of Lightpath, its fiber-based commercial services unit, by hiring Goldman Sachs to help with the process, according to a Reuters report on Friday.

Reuters called those discussions "early," but noted that Altice USA is looking at multiple options, including an outright sale or bringing an investor on board.

Altice USA does not break out Lightpath financials, but the unit brings in more than $200 million per year in EBITDA, Reuters reported, citing an unnamed source said to be familiar with the company. Altice USA posted $348.08 million in business services and wholesale revenues in Q4, up 5.3% versus the year-ago quarter.

The eventual fate of Lightpath has been a topic of speculation in recent weeks, and a sale would appear to fit well with a strategy that Altice Europe has used through the sale of certain fiber assets aimed in part to help the company reduce its debt load.

Last month on the company's Q4 earnings call, Altice USA CEO Dexter Goei said the company has been "pretty open that we are reviewing the Lightpath asset and working work internally to see whether anything makes sense strategically to do with that asset."

He later called Lightpath an asset that has become "less core" to Altice USA's overall business.

"If we were to look at monetizing some or all of Lightpath assets, it's because it becomes very attractive for shareholder value creation...If we were to look at monetizing some or all of Lightpath assets, it's because it becomes very attractive for shareholder value creation," Goei said at the time.

Altice USA has been asked for further comment.

Cowen & Co. believes that a sale of Lightpath could bring in up to $4 billion and give its stock a shot in the arm. Those analysts also identified ZenFi, OCG and Conterra among the most likely potential suitors for Lightpath, alongside possibilities that could involve Crown Castle, Charter Communications and CenturyLink.

According to Vertical System Group's latest US Cable MSO Ethernet Leaderboard, Altice USA ranks fourth among its cable industry peers. Spectrum Enterprise, Charter's business services unit, tops the latest list, followed by Comcast and Cox Communications. Of that group, Comcast and Spectrum Enterprise had the highest Ethernet port growth in 2018, according to VSG's analysis.

Cogent heads up VSG's US Ethernet Leaderboard for "Competitive Providers" for 2018, followed by Zayo, GTT and Sprint. CenturyLink topped the "Incumbent Carriers" list, followed by AT&T, Verizon, Windstream and Frontier.

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— Jeff Baumgartner, Senior Editor, Light Reading

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