US-based cable operator Liberty Global has signed a letter of intent to sell its French operation for €1.25bn (US$$1.51bn) to Cinven, the UK-based firm that already owns sizeable Francophone cable operations.
UPC France has about 1.6m customers of its television, broadband internet and telephone services, primarily around Paris through its Noos brand. UPC France reportedly paid €650m for Noos in 2004.
The company recently sold its operations in Norway to fellow UK buyout firm Candover for €450m and is seeking a buyer for its Swedish business, which is expected to be bought shortly by private equity-backed Com Hem.
Although the deal has to be agreed by the country’s powerful workers’ council, Cinven is expected to pay a full 11.4 times UPC France’s 2005 operating cashflow, but with corporate overhead excluded from the calculations.
In November, Cinven paid about €500m for French cable operator Altice One to add to the Numéricable deal completed a year earlier. Cinven owns about 70% of Altice, with the founding stakeholders holding the remaining 30%. Altice One was founded in 2002 with funds from SG Capital Europe, Pechel Industrie and a group of private investors to operate in Belgium and Luxembourg.
In March 2005, Cinven and Altice bought the cable operating subsidiaries of France Telecom and Vivendi Universal for €528m and renamed them Numéricable. Cinven held 50.01% of the company with Altice 10% and the vendors 19.99% each when the deal was struck in December 2004.