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Altice to offload stake in Lightpath unit to Morgan Stanley
Posted on Wednesday, 29 July 2020 11:27
Morgan Stanley Infrastructure Partners (MSIP) has agreed to pick up an almost 50.0 per cent stake in Altice USA’s Lightpath fiber enterprise business for an implied enterprise value of USD 3.20 billion.

The consideration represents a multiple of 14.6x fiscal 2019 adjusted earnings before interest, taxes, depreciation and amortisation and an operating free cash flow multiple of 25.7x.

Altice is expecting to receive cash proceeds of USD 2.30 billion from the sale and related financing activity and will also retain a 50.1 per cent stake in Lightpath and maintain control of the business.

The addition of MSIP as an investor will support ongoing and new growth initiatives at the target, improve operation performance and provide strategic and financial flexibility, enabling to focus on the distinct opportunities for value creation and long-term growth.

Completion is expected in the fourth quarter of 2020, following regulatory approvals.

Upon closing, Lightpath will be financed independently outside CSC Holdings, with a portion of the net proceeds after tax expected to be used by Altice to repay debt.

Dexter Goei, chief executive of Altice, said: “Lightpath is an expansive and best-in-class enterprise fiber communications business with tremendous long-term potential.

“Bringing in a strategic investor allows Altice USA to focus on operating our core businesses while infusing the capital needed to grow Lightpath and maximise 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.”

Lightpath provides advanced fiber, Ethernet, data transport, Internet Protocol-based virtual private networks, Internet access, managed services, telephony services, including session-initiated protocol trunking in New York.

Customers include companies in the healthcare, financial, education, legal and professional services sectors, among other industries.

At 30th June 2020, Lightpath had over 11,400 buildings connected to fiber network, with its advanced optic network extends more than 8,800 route miles, which includes 600,000 miles throughout the New York metropolitan area.

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