Altice subsidiary acquires Covage to expand footprint
Altice Europe’s French subsidiary, SFR FTTH and its consortium of financial investors has entered into an exclusivity agreement with Cube Infrastructure Fund and Partners Group to acquire 100 per cent of wholesale operator, Covage. The deal is worth a cash consideration of €1.0bn.
Covage has a total of 2.4 million European homes to be passed, including 0.8 million that have already been built. These will be added to SFR FTTH footprint of more than 5.4 million secured homes to be passed – including 1.7 million homes built. When it becomes part of SFR FTTH, there will be a total of around 8 million secured homes to be passed – including 2.5 million homes already built.
The acquisition is designed to help SFR FTTH continue to execute its strategy of meaningfully expanding its footprint, with more households still yet to be awarded as well as selective opportunities for consolidation. It will be financed with a new €70 million non-recourse debt raised at Opco level, €465 million cash equity to be contributed by Altice and €465 million cash equity to be contributed by SFR FTTH financial investors. The roll-out of additional homes is fully financed by a committed capex facility.
Patrick Drahi, founder of Altice, commented: ‘We are extremely proud to integrate Covage, a great company, with a portfolio of areas in France complementary to ours. With this transaction we also bring on board excellent local relationships. We continue to be focused on deleveraging Altice Europe notably thanks to growing revenues and EBITDA which will be supplemented with disposal proceeds. We are in advanced discussions with several parties in relation to our Portuguese fibre asset. This process is supported by the significant appetite for fibre in Europe clearly demonstrated by the present transaction which has been strongly supported by our financial partners in SFR FTTH.’
The transaction is expected to close in the first half of 2020. Earlier this year Altice Europe closed a transaction to sell a stake of 49.99 per cent in the SFR FTTH subsidiary.