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BC Partners, CPPIB seal $6.6bn Suddenlink MBO

19 Jul 2012

BC Partners and the Canadian Pension Plan Investment Board have agreed a $6.6bn MBO of US cable company Suddenlink from its private equity owners.

Goldman Sachs, Quadrangle and Oaktree have made a three times return on their 2004 investment through the deal, which comprised $1.985bn of equity, $500m of debt and the assumption of just over $4bn of existing liabilities.

The purchase price represented an 8.6 times EBITDA multiple based on the company’s first quarter results.

Suddenlink, which is the business name of Cequel Communications Holdings, is the seventh-largest cable operator in the US, offering television, high-speed internet and telephony services to more than 1.4 million customers.

It generated revenues of $1.96bn and adjusted EBITDA of $743m in the 12 months to 31 March 2012.

BC Partners co-chairman and managing partner Raymond Svider said, “Cable is an industry we know well in both Europe and the United States, and epitomises the defensive growth characteristics we typically seek in an investment.

“Suddenlink is one of the most attractive cable companies in the US today, with a world-class infrastructure and a dedication to providing customers with the very best offering and service.

“We are excited to be partnering with Jerry Kent and the high quality and experienced management team he has assembled.

“Jerry and his team have an enviable track record of delivering strong equity returns to shareholders, and we are looking forward to working with them to help continue growing Suddenlink and take it to the next level.”

CPPIB senior vice president André Bourbonnais said, “This represents a unique opportunity to acquire a leading cable operator that has consistently generated industry-leading results

“We are delighted to partner with Suddenlink’s management team and BC Partners to position the company for continued growth and long-term success.”

LionTree Advisors and Goldman Sachs acted as financial advisors for Suddenlink, while Credit Suisse worked on behalf of BC and CPPIB.

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