Altice USA to sell almost 50% of Lightpath fiber enterprise business to Morgan Stanley Infrastructure Partners

July 30, 2020

Altice USA says the cash infusion will fund ongoing and new growth initiatives at Lightpath as well as improve operational performance and provide strategic and financial flexibility.

Stephen Hardy

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Cable MSO Altice USA (NYSE: ATUS) says it has agreed to sell 49.99% of its Lightpath fiber enterprise business to Morgan Stanley Infrastructure Partners (MSIP). The deal carries an implied enterprise value of $3.2 billion. Altice USA says the cash infusion will fund ongoing and new growth initiatives at Lightpath as well as improve operational performance and provide strategic and financial flexibility. The transaction is set to close in the fourth quarter of this year.

Altice USA will retain a 50.01% interest in Lightpath and maintain control of the company its Altice progenitor acquired along with Cablevision in 2016 (see “Altice completes Cablevision buy, forms Altice USA, shuffles management”). “Lightpath is an expansive and best-in-class enterprise fiber communications business with tremendous long-term potential,” said Dexter Goei, CEO of Altice USA. “Bringing in a strategic investor allows Altice USA to focus on operating our core businesses while infusing the capital needed to grow Lightpath and maximize shareholder value. We are pleased to partner with MSIP, a leading investor in telecommunications infrastructure with deep operational and management expertise, to propel Lightpath and unlock its future potential.”

Altice USA says the MSIP investment represents a multiple of 14.6X FY 2019 adjusted EBITDA and an operating free cash flow (adjusted EBITDA less capex) multiple of 25.7X. The company says it will net total gross cash proceeds of approximately $2.3 billion from the sale and related financing activity (net cash proceeds of approximately $1.1 billion after tax and initial debt repayment). Some of the net proceeds after tax are expected to be used to repay debt in such a way that the deal is at least leverage-neutral to debt holder CSC Holdings, LLC. Upon closing, Altice USA expects Lightpath to be financed independently outside of the CSC Holdings, LLC debt silo. Remaining proceeds may be used for additional debt paydown and/or repurchase of Altice USA shares, the company adds.

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About the Author

Stephen Hardy | Editorial Director and Associate Publisher, Lightwave

Stephen Hardy is editorial director and associate publisher of Lightwave and Broadband Technology Report, part of the Lighting & Technology Group at Endeavor Business Media. Stephen is responsible for establishing and executing editorial strategy across the both brands’ websites, email newsletters, events, and other information products. He has covered the fiber-optics space for more than 20 years, and communications and technology for more than 35 years. During his tenure, Lightwave has received awards from Folio: and the American Society of Business Press Editors (ASBPE) for editorial excellence. Prior to joining Lightwave in 1997, Stephen worked for Telecommunications magazine and the Journal of Electronic Defense.

Stephen has moderated panels at numerous events, including the Optica Executive Forum, ECOC, and SCTE Cable-Tec Expo. He also is program director for the Lightwave Innovation Reviews and the Diamond Technology Reviews.

He has written numerous articles in all aspects of optical communications and fiber-optic networks, including fiber to the home (FTTH), PON, optical components, DWDM, fiber cables, packet optical transport, optical transceivers, lasers, fiber optic testing, and more.

You can connect with Stephen on LinkedIn as well as Twitter.