Cinven books 1.5bn gain on Numericable

Buyout firms Cinven and The Carlyle Group have agreed to sell their remaining shares in French cable operator Numericable to partner Altice in a cash-plus-stock deal, following the group’s €17 billion acquisition of French mobile operator SFr from Vivendi.

The deal leaves Cinven sitting on a capital gain of about €1.5 billion on its investment in Numericable, with an internal rate of return of more than 160 percent, the UK-based firm said in a statement today.

Altice has agreed with Carlyle and Cinven to buy their entire stakes in Numericable, of 21.32 percent and 13.27 percent respectively. The Luxembourg-based group will pay cash for about 14 percent of this – comprising about half of Cinven's stake and one third of Carlyle's – at €30.50 per share, a 15 percent premium to Numericable's closing price of €26.44 last week. It will buy the remainder in stock, offering 0.97 of one of its shares for each Numericable share. Altice's stake in Numericable will increase to almost 75 percent as a result of the deal, up from the 40 percent it currently holds.

Altice and Numericable recently won the auction to buy SFr from Vivendi, after offering €13 billion in cash plus a 20 percent stake in the combined business.

Cinven and Altice originally created Numericable in 2005, buying up the cable assets of France Télécom, Vivendi-owned Canal+, and TDF in March for €528 million, and subsequently combining them with Altice’s cable business in November of that year. The combined group – which was 70 percent owned by Cinven and 30 percent by Altice – went on to pursue a buy-and-build strategy, making five other cable acquisitions. Carlyle bought into the business in 2008, taking a 38 percent stake alongside Cinven.

The business was refinanced no fewer than seven times, allowing the buyout firms to de-risk their investment, before floating in Paris in November last year.

Cinven today that it had already received €1 billion of its capital gain in cash, and would receive another €250 million in cash within the next nine months as part of this deal. The firm will also retain a 3.6 percent stake in Altice, which is currently valued at €250 million. The transaction is likely to be subject to a short lock-in period, although Cinven declined to comment on the details. 

Carlyle could not be reached for comment on its own return from the deal, or its plans for its remaining shares in Altice.