Suddenlink Communications, the seventh-largest cable television provider in the United States, is to be purchased by British private equity firm BC Partners and the Canada Pension Plan Investment Board in a cash-and-debt deal for nearly $6.6 billion.
The current owners are Oaktree Capital Management, Goldman Sachs Capital Partners and Quadrangle.
Suddenlink employees 6,000 and services 1.4 million customers in Texas, West Virginia, North Carolina, Oklahoma, Arkansas and Louisiana. It offers cable television service along with telephone and high-speed internet services to residential and commercial customers. For the fiscal year that ended March 31, Suddenlink earned $1.96 billion in revenue and $743 million in adjusted earnings.
BC Partners Co-Chairman and Managing Partner Raymond Svider says: “Suddenlink is one of the most attractive cable companies in the US today, with a world-class infrastructure. Cable is an industry we know well in both Europe and the United States."
BC Partners has offices throughout Europe and in New York City, while the Canada Pension Plan Investment Board is Canada’s second-largest pension fund.
The deal is expected to close by 2013.
Recent Cable Buyouts
Despite the struggling economy, the cable television industry has been thriving as customers still demand television and internet services, with industry acquisitions and mergers common. Acquiring a cable provider offers the purchaser steady cash flow and revenue growth, while the cable provider gets the opportunity to update its infrastructure and technology.
In other recent cable deals, Canadian cable provider Cogeco Cable Inc. agreed to purchase cable operator Atlantic Broadband for $1.36 billion to gain a foothold in the US, where Atlantic provides service to customers in five states. Time Warner Cable also purchased Insight Communications for $3 billion in August 2011.
Key Statistics - Cable & Broadcasting Market In The US (source: MarketLine)
- In 2010, the broadcasting and cable TV market in the United States had revenue totaling $132 billion. This represents a compound annual growth rate (CAGR) of slightly more than 1% for the time frame 2006 to 2010.
- In 2010, the most lucrative segment of the US broadcasting and cable TV market was television advertising sales. This segment had revenue totaling $67 billion, or approximately 51% of the total market value.
- For the period 2010 – 2015, market performance is predicted to accelerate, and by 2016, it is forecast to have a CAGR of 3% and be valued at $152 billion.