Altice USA, the cable operator that Netherlands-based Altice NV (ATCA.AS) put together by acquiring Cablevision and Suddenlink Communications, on Tuesday filed for an initial public offering that seeks to raise $1 billon to $2 billion, according to a source familiar with the matter.
Going public allows Altice’s founder, French billionaire Patrick Drahi, to expand his budding U.S. cable empire by giving Altice USA public stock it can use to help finance more acquisitions.
Altice USA will need all the financial firepower it can muster to be competitive for U.S. acquisitions with rivals Charter Communications Inc (CHTR.O) and Comcast Corp (CMCSA.O) as a wave of mergers is expected to sweep the wireless and telecom sector. Potential acquisition targets for Altice, such as regional provider Cable One Inc CABO.O, are trading at high valuations with takeover speculation baked into their stock prices, analysts say.
Last week John Malone’s Liberty Interactive Corp (QVCA.O) said it would acquire Alaska-based cable provider General Communication Inc (GNCMA.O) for $1.12 billion. Reuters also reported that WaveDivision Holdings LLC is exploring a sale that its private equity owners hope will value the regional U.S. provider of cable TV, internet and telephone service at more than $2 billion, including debt.Altice USA became the fourth-largest U.S. cable provider after its parent company acquired Suddenlink in 2015 and Cablevision last year. It serves 4.9 million U.S. customers, according to the company’s filing with the U.S. Securities and Exchange Commission.
Altice is moving to list its U.S. subsidiary just as the IPO market is showing signs of life after a listless 2016. Snapchat’s owner, Snap Inc (SNAP.N), raised $3.4 billion in an IPO earlier this year.
Altice USA’s current minority shareholders, London-based private equity firm BC Partners and the Canadian Pension Plan Investment Board, which jointly own about 30 percent of Altice USA, are ready to lower their combined holdings. Altice is expected to keep its 70 percent stake in Altice USA intact, according to the source.
JP Morgan (JPM.N), Morgan Stanley (MS.N), Citigroup (C.N) and Goldman Sachs (GS.N) are the banks serving as joint book-runners on Altice’s U.S initial public offering.