(MENAFN- AFP) France-Israeli telecoms and media magnate Patrick Drahi made a foray into the US market Wednesday by buying 70 percent of Suddenlink Communications in a deal that values the seventh-largest US cable company at $9.1 billion (8.2 billion euros).
The deal is the latest in a series of recent acquisitions that has seen Drahi's Luxembourg-based Altice emerge as telecoms player.
"With this acquisition, the Altice Group enters the large and attractive US cable market and takes a further step in diversifying and balancing its portfolio of high-quality businesses," said a statement from the company, which owns the French cable and mobile operator Numericable-SFR.
With 1.5 million residential and 90,000 business customers in Texas, West Virginia, Louisiana, Arkansas and Arizona, Suddenlink is present in attractive growth markets and generated $2.3 billion in revenue and over $900 million operating profits last year.
"We are very excited about the acquisition of Suddenlink and are highly committed to continue to improve network investment, customer offers and service innovation in the attractive US market," Altice chief executive Dexter Goei said in a statement.
"Our investment in Suddenlink, our first in the cable sector in the US, opens an attractive industrial and strategic avenue for Altice in the US, one of the largest and fastest growing communications markets in the world," he added.
The 51-year-old Drahi -- whose media interests include a majority stake in the French daily Liberation and the L'Express newsweekly, as well as the Israeli TV station i24 News -- has been on a telecoms acquisition drive over the past year.
Altice propelled itself into the major leagues in France when it won a bidding war for mobile operator SFR, which it is merging with its Numericable cable operation deal there.
That deal, worth as much as 14.25 billion euros, was financed mostly with debt, and raised eyebrows as Altice's market capitalisation at the time was just 11.3 billion euros.
It also snapped up the Portugese assets of Brazil's Oi-Portugal Telecom for 7.4 billion euros.
Altice now boasts 30,000 employees in 15 countries and 30 million subscribers. Although primarily European, Altice is also present in a number of other countries including Israel, where it owns the top pay TV operator HOT, which had 1.1 million customers and over 857 million euros in revenue last year.
Drahi's move for Suddenlink shows up his French rival Xavier Niel, who launched the upstart Free mobile and Internet service providers, but failed to break into the US market when his bid for T-Mobile US flopped last year.
Altice said it would pay $1.2 billion in cash for the Suddenlink stake and that most of the rest of the transaction would be financed with $6.7 billion of new and existing debt at the US company.
The remainder would be financed by a $500 million vendor loan note and roll over of investments from current owners BC Partners and CPP Investment Board, which will retain a 30 percent stake in Suddenlink.
- Drahi still on the prowl -
And the Suddenlink purchase may not be Drahi's last, according to a source familiar with the transaction, as it is looking to participate in the consolidation sweeping the US cable sector.
The source said Drahi is interested in larger cable companies, like number two operator Time Warner Cable (TWC) with 11 million subscribers in major markets like New York and Los Angeles.
Since TWC's merger with market leader Comcast was called off last month due to opposition from antitrust regulators, it has already been approached by rivals.
The source said there have already been contacts between Altice and TWC, but that the Suddenlink transaction must be closed first, which is expected in the final quarter of this year following regulatory approvals.
Altice's shares shot up 7.7 percent in early afternoon trading to 124.5 euros in Amsterdam, where they are listed on the Euronext exchange.
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