Since the summer of 2023, Altice’s priority has been to sell assets to meet debt repayment which is becoming urgent. Patrick Drahi even assured then that it was his “only priority”.
On Tuesday, November 21, SFR, owned by Altice, therefore formalized the sale of its French data centers to the Morgan Stanley fund. The operation should bring in 535 million euros.
No less than 257 data centers in France are affected, as well as office spaces.
SFR retains 30% of the capital
Note that SFR retains 30% of the capital, via a new structure, called UltraEdge, operated jointly by SFR and Morgan Stanley.
UltraEdge will thus have an installed capacity of more than 45 MW of capacity and approximately 33,000 m² of office space distributed throughout the country.
SFR also becomes tenant of the premises. “The passive infrastructure and data center equipment will be transferred to UltraEdge, with the servers and active equipment remaining at SFR,” the group indicates.
Morgan Stanley is used to negotiations with Patrick Drahi
Morgan Stanley is used to negotiations with Patrick Drahi. In 2018, Altice sold 75% of its telecom towers in Portugal, valued at 660 million euros, to the American bank, associated with Horizon Equity Partners. A year later, it bought 49.99% of its fiber network in Portugal, estimated at 4.6 billion euros. In 2020, the telecoms tycoon sold 49.99% of LightPath, a manufacturer of laser and fiber optic equipment.
The sale of infrastructure to get out of debt is not in itself new in the world of telecoms and goes back before the Pereira affair. In 2021, Altice sold Hivory, its TowerCo in France, to the Spanish operation Cellnex. That is 10,500 mobile telephone sites previously managed by SFR and valued at 5.2 billion euros.
Altice boasts the creation with this new structure of “the first independent distributed data center operator on a national scale”.
The operation should bring in an additional 175 million euros over the next 7 years
Furthermore, the operation should bring in an additional 175 million euros for Altice over the next seven years, via the new data centers which will be built by the operator and sold to UltraEdge.
This sale should allow Altice to very slightly reduce its debt, which amounts to 60 billion dollars, including 24 billion euros for Altice France.
“The planned transaction values UltraEdge at an enterprise value of 764 million euros, which represents an attractive multiple of approximately 29x the 2023 pro forma EBITDA of 26 million euros,” indicates the group.
Sale by cut
The amount collected represents almost a third of the reimbursement that the company must make in 2025. So other solutions must be found.
In mid-September, Les Echos claimed that Patrick Drahi had put Meo, the leading Portuguese operator, present in mobile and landline telephony, internet access and pay television, and the fiber deployment company FastFiber up for sale.
Altice would expect at least 10 billion euros from the sale of Meo, or 3.5 times the operator’s turnover (2.8 billion euros).
At the beginning of October, Altice raised a new loan of 800 million euros, and Altice International managed to postpone the repayment of most of its debt by two years.
Still, the sale of the operator SFR, the nugget of Patrick Drahi’s telecom empire, seems to be in the pipeline.