Altice has reached an agreement to acquire Cablevision (NYSE: CVC) for $17.7 billion, a deal that would give the service provider a larger presence in the business services market via the MSO's Lightpath division.
In the business market, Lightpath is an established provider serving the New York metro area.
Driven by Ethernet sales, Lightpath reported that second net revenues rose 3.4 percent to $91 million, while operating income increased 19.5 percent to $20.3 million.
From a business services perspective, Lightpath comes with a number of attractive fiber assets. Since launching the division, Lightpath has built a fiber network with over 5,800 route miles and 208,000 fiber miles. It has also increased the density of its on-net business reach to over 7,000 buildings in its territory.
While Lightpath is not nearly as large as Comcast Business or Charter, Altice can immediately get access to the service provider's growing base of medium and large customers.
Lightpath has carved a sizeable niche serving large regional business, particularly in the areas of health care, local government and financial services.
Having the financial backing of a large company like Altice could also potentially benefit Lightpath with a larger pool of capital to potentially expand its presence in its existing regions and others.
The cable industry's presence in the U.S. business landscape is in the midst of great change due to consolidation of the market and moves to enhance business service units.
Earlier this week, Comcast announced that it created a division focused on large multisite businesses. This division will offer business services to large Fortune 1000 business customers in the U.S., putting them in direct competition with large telcos AT&T (NYSE: T) and Verizon (NYSE: VZ). Meanwhile Charter Communications' (NASDAQ: CHTR) pending deals for Time Warner Cable (NYSE: TWC) and Bright House Networks could also potentially shake up the business services market as the combined company will have a larger set of services and fiber assets.
Overall, Altice's Cablevision deal certainly alters the cable marketplace. Upon completion, Altice would become the fourth-largest cable operator in the United States, trailing Comcast, Charter Communications and Cox Communications, and the country's seventh largest pay-TV operator.
- see the release
- WSJ has this article (sub. req.)
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