Riding the IPO Wave Altice-Style
The United States branch of Altice Inc. is preparing to sell part of the company in an initial public offering to be staged later this year. Altice is a multi-national telecommunications firm spanning over seven countries. Its chief administrator is founder and CEO Patrick Drahi. From its global operations, Altice is valued at around $34 billion. The move to sell Altice USA’s stock comes as the enterprise plans to ride the strong IPO market in the United States so as to raise more revenue for its continued expansion. The CEO, who is also the company’s major shareholder also plans to take advantage of this year’s high stock market upon the announcement of President Trump’s policy to improve the country’s infrastructure.
Apart from the expansion of the company in line with its services, funds from the new release could also be used to make new acquisitions. The firm would then ultimately serve to increase the company’s net revenue, with returns from newly acquired companies being used to fund services elsewhere. One of the potential enterprises Altice USA is interested in buying is Cox Communications Inc.
Currently, Drahl owns close to 70 percent of Altice’s stock. The rest is shared between Canada Pension Plan Investment Board and BC Partners. In the wake of the planned issuance, no formal decisions have been made concerning the sale of shares from major shareholders. Most of the shares to be put up in the stock exchange will instead come from the firm’s fund holdings. Additionally, Altice may sell a minor part of its stake.
At the end of the 2016 financial year, Altice announced a revenue of 8.2 billion Euros. Currently, the company has a net debt of 50 billion Euros. However, taking on more debt is not a problem for the firm since it refinanced 21 billion euros over last year. The company could raise 23 to 27 billion Euros upon listing its USA affiliate. Key enterprises in the issuance are reported to be Goldman Sachs and JP Morgan.
Altice’s listing in the United States would be another milestone passed in Drahl’s expansion plans for the company. In other parts of the world, the firm is already being publicly traded. Its stock is currently most successful in Amsterdam, where it rose by as much as 3 percent in the last week. In France, however, the company has struggled on markets as a result of stiff competition from Orange, which is the largest telecommunications firm in the country.
Despite market pressure elsewhere, Altice has thrived in the United States. The company has acquired cable companies Cablevision Systems Corporation and Suddenlink Communications in its running here. Canada Pension Plan and BC Partners were co-owners of Suddenlink before it was purchased by Altice. Further, the two firms invested along Altice when it was acquiring Cablevision last year. As a result of these two successful operations, it is likely Cox Communications could soon be under Altice’s management if Drahl’s company stages a successful issuance.
Altice has also been making strides in innovation and upgradability. In 2016, the company announced the launch of a plan to upgrade broadband services across the US. The move would enable Altice to stay up to date with technology trends and remain relevant amongst competitors such as AT&T and Charter Communications Inc.