The Canada Pension Plan Investment Board will receive about $1.16-billion (U.S.) in cash and promissory notes as its part of a deal that will see European telecom company Altice SA to buy a controlling stake in U.S. cable operator Suddenlink.
Altice, headquartered in Luxembourg and active in several European countries, has agreed to purchase a 70-per-cent stake in the company that owns Suddenlink from CPPIB and its partner, a fund advised by European private equity firm BC Partners.
The sellers will each keep a 12 per cent stake in Suddenlink's parent, Cequel Communications Holdings, and receive $960-million cash and a $200-million note for their portion of the deal, which requires U.S. regulatory approval.
The transaction – expected to close by the end of the year – pegs Suddenlink's value at about $9.1-billion.
The CPPIB and its co-investors acquired Suddenlink in 2012 in a deal valued at $6.5-billion.
"This transaction is an excellent opportunity to realize a portion of the embedded value of CPPIB's original investment in Suddenlink," said Mark Jenkins, a senior managing director and global head of private investments at CPPIB.
"We are now looking forward to developing a long-term partnership with Altice, one of the largest global telecom companies."
The deal marks Altice's first U.S. acquisition..
It has grown through a series of acquisitions over the past dozen years, expanding from a small regional internet and cable provider in France's Alsace region to making a $18.5-billion acquisition last year of France's No. 2 mobile phone operator, SFR. Earlier this year, Altice also bought Portugal Telecom for $8.4-billion.
Based in St. Louis, Mo., Suddenlink offers television, high-speed Internet and telephone services to 1.5 million residential and commercial customers in several U.S. states.
The CPPIB invests funds not currently required to pay benefits for the Canada Pension Plan. As of Dec. 31, 2014, the fund totalled $238.8-billion.