Private equity group records 157% return on Numericable

15 April 2016 | Alan Burkitt-Gray


Private equity group Cinven has made a profit of €1.7 billion on its 11-year investment in French cable operator Numericable, following the sale of its last stake in the business.

The group spent €528 million on a 70% stake in Numericable in 2005-06, alongside Patrick Drahi’s Altice. Over a series of deals since then – ending with the final sale of its last stake in March to Altice, just announced – the company has returned €2.2 billion to its investors.

Nicolas Paulmier, a partner at Cinven, said: “The sale of our remaining shareholding in Altice ends what has been an epic case study of the backing by Cinven of an exceptional entrepreneur, Patrick Drahi and his team, in a contrarian project. During Cinven’s ownership, Numericable underwent a complete transformation from a regional operator to the number one alternative French telecom operator and clear French leader in high speed networks.”

In recent years Numericable bought French mobile operator SFR from Vivendi. Numericable today has an enterprise value of around €30 billion, said Cinven. It added: “Cinven has returned €2.2 billion to investors, representing a net capital gain of €1.7 billion, an internal rate of return of 157% and a money multiple of 4.7 times.”

Thomas Railhac, senior principal at Cinven, added: “The returns achieved from this investment are the result of the strong combined vision and partnership between Cinven and Altice, the telecom company founded by Patrick Drahi, who has since become one of Europe’s most successful telecoms entrepreneurs, as well as Carlyle, who joined us in 2008.”

Drahi, president of Altice, said that the project had been through tough times “during the 2008-2010 financial crisis when together we built the best solutions for Numericable by implementing an aggressive and innovative investment and improvement industrial programme while reengineering the whole financial structure, both on the debt and the equity markets with several successful bonds issuing and two major IPOs in Europe.”

Cinven’s return from Numericable exceeds its results from Dutch cable operator Ziggo, now owned by Liberty Global. That generated €1.7 billion and a money multiple of 2.8 times. Cinven’s latest investment in the sector is in Ufinet, a Spanish fibre operator, which it bought in 2014 for €510 million.