Suddenlink Communications, the name under which Cequel Communications Holdings LLC conducts its business, is to be acquired in a USD6.6bn (EUR5.4bn) deal by an investor group comprising UK-based private equity outfit BC Partners Ltd, Canadian pension funds manager CPP Investment Board (CPPIB) and the management of the US cable operator.
The total value of the transaction includes close to USD2bn of equity, incremental debts totalling USD500m and the assumption of slightly more than USD4bn of existing net debts.
The group of sellers is led by Goldman Sachs Capital Partners, the private equity arm of the US investment banking giant, and also features buy-out investors Quadrangle Group LLC and Oaktree Capital Management LP. The deal is seen as closing during the fourth quarter and is subject to standard conditions, among them clearance from regulators.
Suddenlink has created a new subsidiary that has received commitment from Credit Suisse Group AG (NYSE:CS) for the provision of senior unsecured bridge loans totalling USD500m. The plan is to use these funds or an equivalent amount secured through the issuance of high-yield bonds to cover partially the purchase price.
LionTree Advisors LLC, Goldman Sachs Group Inc (NYSE:GS), Paul Hastings LLP and Seyfarth Shaw LLP served as advisers to Suddenlink in connection with the transaction. BC Partners and CPPIB relied on counsel from Credit Suisse, Latham & Watkins LLP and Wachtell, Lipton, Rosen & Katz LLP.
Suddenlink ranks seventh among US cable operators, serving more than 1.4m residential and commercial subscribers across Texas, West Virginia, North Carolina, Oklahoma, Arkansas and Louisiana. For the year to 31 March 2012, the group booked revenues of USD1.96bn and had adjusted EBITDA of USD743m.
Chairman and chief executive Jerry Kent said that the deal would provide the company with fresh funds to maintain investment in infrastructure, technology and talent, allowing it to continue delivering superior customer service and industry-leading results.