Dexter Goei, CEO of cable and mobile telecoms firm Altice.
Benoit Tessier | Reuters
Altice USA, the fourth-biggest U.S. cable firm, is focusing on private equity infrastructure funds as possible purchasers early in its Suddenlink sale procedure, according to persons familiar with the matter.
Altice USA Chief Executive Officer Dexter Goei confirmed Wednesday the firm has begun a sale procedure for Suddenlink, a cable provider that gives service to 17 states such as Texas, Louisiana and West Virginia. Altice USA acquired Suddenlink for $9.1 billion in 2015. Bloomberg first reported the talks of a sale.
Altice USA’s economic advisers have reached out to extra than a dozen private equity funds in hopes of locating a purchaser, stated the persons, who asked not to be named for the reason that talks are private. There have been no discussions but with Charter, the second-biggest U.S. cable firm and a possible suitor, offered its lack of a geographical footprint in a lot of of the locations Suddenlink serves, the persons stated.
A spokesperson for Altice USA declined to comment on possible purchasers.
The valuation of publicly traded cable assets Comcast and Charter have come down about 25% or extra this year as broadband internet growth has slowed. Altice USA is interested in promoting Suddenlink so it can concentrate on operating the assets formerly named Cablevision, which is additional along in its transition to fiber, a greater-speed network that can superior compete with expanding competitors from wireless corporations. Goei stated Wednesday these assets will be “fairly completely fiberized” by the finish of 2024.
Altice USA does not have a set target price tag in thoughts for Suddenlink, the persons stated. The discussions to sell Suddenlink are nonetheless early and no deal is assured, the persons stated.
Some infrastructure funds specialize in generating the shift from cable to fiber, which is why Suddenlink may possibly be an attractive acquisition for a fund searching to invest in an asset it can sell later.
Blackstone Infrastructure Partners, EQT, and Stonepeak are amongst funds that have produced cable or fiber network acquisitions in current years. Stonepeak paid more than $8 billion of Astound Communications, the sixth-biggest U.S. cable provider, in 2020.
Private equity infrastructure funds are also interested in acquiring WideOpenWest, which gives cable service to regions of the nation that currently have one more cable operator with a license to offer you online, telephone and Television service. Bloomberg reported in May perhaps that Morgan Stanley’s infrastructure investment arm was interested in buying the so-called cable overbuilder, which has a market place valuation of $1.7 billion.
If a deal for WideOpenWest, or WOW, occurs initially, Altice USA can argue Suddenlink must trade at a greater many. Suddenlink is the lone cable provider in about 70% of the markets it serves, generating it extra beneficial to a possible purchaser that desires extra pricing energy and fewer competitors.
Disclosure: Comcast is the parent firm of NBCUniversal, which owns CNBC.
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