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.

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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