The Canada Pension Plan Investment Board has teamed up with a European private equity firm to buy the seventh largest cable operator in the U.S. in a deal worth US$6.6 billion.
CPPIB said it will working with BC Partners and members of the cable operator's management team to acquire Suddenlink Communications, which is run by Cequel Communications Holdings LLC.
CPPIB and BC Partners will equally own the majority of the company and Suddenlink's management will own the balance.
The deal includes $1.99 billion of total equity to be invested by CPPIB, BC Partners and certain members of Suddenlink management.
It also includes incremental debt of $500 million and the assumption of existing net liabilities of $4.09 billion as of March 31 this year.
Cequel's previous ownership group included Goldman Sachs Capital Partners, Quadrangle and Oaktree Capital Management.
The deal is expected to close in the fourth quarter of this year.
"This represents a unique opportunity to acquire a leading cable operator that has consistently generated industry-leading results," André Bourbonnais, CPPIB's senior vice-president of private investments said in a statement.
"We are delighted to partner with Suddenlink’s management team and BC Partners to position the company for continued growth and long-term success."
Suddenlink offers television, high-speed Internet and telephony services to over 1.4 million residential and commercial customers, primarily in Texas, West Virginia, North Carolina, Oklahoma, Arkansas and Louisiana.
Its network covers 3 million homes.
The company said its new partners would help it continue to grow.
"This agreement will allow us to continue to invest in our infrastructure, new technology, and most importantly, our people," Suddenlink’s chairman and CEO Jerry Kent said in a statement.
"We have 6,000 employees who are dedicated to providing a superior level of customer care, and who generate consistent, industry-leading operating results. The injection of fresh, forward-looking capital is a testament to their hard work and capabilities."
In connection with the acquisition, a newly formed subsidiary of the Suddenlink has entered into a commitment letter with Credit Suisse for $500 million of senior unsecured bridge loans.
The company said it expects to use the proceeds to fund a portion of the purchase price.