BC Partners and CPPIB seal $6.6bn cable deal

BC Partners and CPPIB will purchase a majority of US cable company Suddenlink from a group of investors including Goldman Sachs Capital Partners, Quadrangle and Oaktree Capital Management.

BC Partners and the Canada Pension Plan Investment Board will purchase US cable operator Suddenlink Communications in a deal valued at $6.6 billion, including the assumption of debt.

Suddenlink is the seventh-largest cable system operator in the US, offering television, high-speed Internet and telephone services to more than 1.4 million residential and commercial customers. For the 12-month period ending 31 March, the company generated $1.96 billion in revenue and roughly $743 million of earnings before interest, tax, depreciation and amortisation, excluding including non-recurring expenses.

BC and CPPIB will purchase an ownership stake in the company from existing investors including Goldman Sachs Capital PartnersQuadrangle and Oaktree Capital Management, with Suddenlink’s management purchasing the remaining minority stake. The transaction includes about $1.98 billion of total equity and $500 million of incremental debt, plus roughly $4.09 billion of existing company debt.

BC will invest from the firm’s €6.5 billion ninth fund that will be roughly 20 percent invested following completion of the transaction, which is expected to close in the fourth quarter of 2012.

“Suddenlink is one of the most attractive cable companies in the US today,” BC Partners managing partner Raymond Svider said in a statement. “Cable is an industry we know well in both Europe and the United States.”
The firm’s most recent cable investment was a $2.6 billion deal for Com Hem, which supplies television, broadband and telephone services in Sweden.

CPPIB system manages a C$25 billion (€18.9 billion; $24.9 billion) private equity programme and frequently participates in multi-billion transactions alongside large private equity fund managers. Last year, CPPIB invested in retail chain 99 Cents Only alongside Ares Capital in a deal valued at $1.6 billion, and together with Allianz Capital Partners and Abu Dhabi Investment Authority acquired a 24 percent stake in Norwegian gas transportation business Gassled for $3.2 billion.

CPPIB was unavailable for comment at press time.