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Altice acquires 100% of Covage by SFR FTTH

November 25, 2019 09.37 Europe/London By Robert Briel

Altice Europe has announced that SFR FTTH has entered into an exclusivity agreement with Cube Infrastructure Fund and Partners Group regarding the acquisition of 100% of Covage for a total cash consideration of €1.0 billion.

Altice Europe works alongside its consortium of financial investors (led by OMERS Infrastructure and including Allianz Capital Partners and AXA Investment Managers – Real Assets, acting on behalf of its clients).

Covage is the 4th largest fibre wholesale operator in France with 2.4 million homes to be passed (including 0.8 million homes already built) which will be added to SFR FTTH footprint of more than 5.4 million secured homes to be passed (including 1.7 million homes built).

Covage will become part of SFR FTTH, resulting in a total of around 8 million secured homes to be passed (including 2.5 million homes already built). With this acquisition SFR FTTH continues to execute on its strategy to meaningfully expand its footprint, with more households still yet to be awarded as well as selective opportunities for consolidation.

Patrick Drahi, founder of Altice, said: “I am very pleased that we are further expanding the leading FTTH wholesaler in Europe. 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 onboard 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. As I have explained previously, 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 combination of SFR FTTH and Covage further expands one of the largest FTTH wholesalers in Europe, the only nationwide infrastructure challenger to the incumbent, with an even stronger competitive position within its footprint.

SFR FTTH and Covage together will massively deploy fibre over the next 3 to 4 years. This will predominantly be built in exclusive areas, where no fibre infrastructure has been built to date.

SFR FTTH and Covage together will reinforce the strong and important partnerships with the French local authorities. The calendar of FTTH deployment expected by local territories will be honoured entirely.
Financial Considerations

Acquisition to be completed by SFR FTTH for 100% of Covage for €1.0 billion in cash.

Acquisition financed with 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 (OMERS Infrastructure, Allianz Capital Partners and AXA Investment Managers – Real Assets, acting on behalf of its clients). The roll-out of additional homes is fully financed by a committed capex facility.

The transaction is expected to close in H1 2020.

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Related

Filed Under: Finance, Newsline Tagged With: Altice, Covage, France, SFR Edited: November 25, 2019 09:37

About Robert Briel

Arnhem-based Robert covers the Benelux, France, Germany, Austria and Switzerland as well as IPTV, web TV, connected TV and OTT. Email Robert at rbriel@broadbandtvnews.com.

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