Kent: Deal Gives Suddenlink Acquisitions Firepower7/19/2012 6:39 PM Eastern
Flush with cash from its new owners, Suddenlink Communications is poised to seek out acquisitions, chairman and CEO Jerry Kent said in an interview Thursday.
Suddenlink agreed to a buyout deal from British private equity giant BC Partners, Canadian pension fund Canada Pension Plan Investment Board and key members of Suddenlink's management team that values the company at about $6.6 billion.
When the deal closes, expected in the fourth quarter, BC Partners and CPPIB will own a super-majority of the company, with Kent, Suddenlink chief operating officer Tom McMillin and chief financial officer Mary Meduski owning a minority stake in the MSO.
In an interview on Thursday, Kent said that in the past, Suddenlink was somewhat constrained in its ability to aggressively go after deals because of the desire of its partners to exit the business.
Those partners -- Goldman Sachs Capital Partners, Oaktree Capital Management and Quadrangle -- had been investors in the company for nearly twice the typical three-to five year time frame before most private equity firms seek to cash out of an investment.
But the wait was more than worth it: Kent estimated that Suddenlink's former private equity owners have tripled their original investment of $900 million, reaping about $3 billion with this deal.
"Some of our investors have been in as long as six to eight years," Kent said. "Private equity investors were wanting to see an exit event in the near future. It really limited our ability to consummate significant acquisitions. Now with new investors that combined manage over $170 billion, it allows us to take a fresh look at growth opportunities."
Suddenlink was an aggressive buyer of cable properties in its early days. And though the company has kicked the tires on most of the cable systems that have come through the deal pipeline in the past several years, its last major purchase was NPG Cable, an 83,000-subscriber MSO with operations in Missouri, California and Arizona in 2011 for $350 million.
While it now has more freedom to seek out deals, Kent said Suddenlink is not going to go on an acquisitions binge. "We are going to continue to be disciplined, but it does allow us to take a look at opportunistic acquisitions," he said.
He declined to name any potential targets, adding that the focus for the past few months has been on getting this deal done. "Now that we have this signed, we can pause, take a breath and think about what our next steps are."