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PREM14A
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form PREM14A on 06/26/2015
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Selected Transactions Analysis. LionTree calculated certain valuation multiples based on the estimated purchase prices paid in the following selected publicly announced U.S. cable industry transactions from 2010 to 2015. The selected transactions consisted of publicly announced transactions involving target companies primarily engaged in the U.S. cable industry with transaction values in excess of $500 million. The calculated multiples included transaction value as a multiple of (i) estimated Adjusted EBITDA for the last twelve-month period, or LTM, and (ii) estimated Adjusted EBITDA for the next twelve-month period, or NTM, in each case, both before and after giving effect to the present value of tax attributes of the target company. The list of selected transactions is set forth below:

 

Announcement Date

 

Target

 

Acquiror

June 2010

  Bresnan Broadband Holdings, LLC   Cablevision Systems Corporation

November 2010

  Mediacom Communications Corporation   Take Private

August 2011

  Insight Communications Company Inc.   Time Warner Cable Inc.

June 2012

  Wave Division Holdings LLC   Oak Hill Capital Partners

July 2012

  Atlantic Broadband LLC   Cogeco Cable Inc.

July 2012

  Suddenlink Communications   BC Partners Limited / CPP
Investment Board

February 2013

  Bresnan Broadband Holdings, LLC   Charter Communications Inc.

March 2013

  Charter Communications, Inc.   Liberty Media Corporation

February 2014

  Time Warner Cable Inc.   Comcast Corporation

April 2014

 

Certain Assets of

Time Warner Cable and Comcast

  Charter Communications Inc.

March 2015

  Bright House Networks   Charter Communications Inc.

May 2015

  Suddenlink Communications   Altice SA

This analysis indicated the following minimum, mean, and maximum LTM and NTM Adjusted EBITDA multiples (both before and after giving effect to the present value of tax attributes of the target company) for the selected transactions, and compared to the multiples implied by the BHN transactions:

 

     LTM Multiple      NTM Multiple  
     Enterprise
Value
     Adjusted
Enterprise
Value
     Enterprise
Value
     Adjusted
Enterprise
Value
 

Selected Transactions

           

Minimum

     7.1x         6.3x         7.0x         5.4x   

Mean

     8.5x         7.6x         7.8x         7.0x   

Maximum

     9.9x         9.6x         9.1x         8.8x   

BHN transactions (based on QoE Effective EBITDA) at Reference Price

     7.3x         6.5x         7.2x         6.4x   

BHN transactions (based on QoE Effective EBITDA) at Reference Price with transaction effects

     7.3x         6.5x         7.2x         6.4x   

BHN transactions (based on QoE Effective EBITDA) at Spot Price

     7.4x         6.6x         7.3x         6.5x   

BHN transactions (based on QoE Effective EBITDA) at Spot Price with transaction effects

     7.4x         6.6x         7.3x         6.6x   

Pro Forma Financial Analyses

DCF Analyses. LionTree performed a discounted cash flow analysis of Pro Forma Charter by calculating the estimated net present value of the unlevered, after-tax free cash flows that Pro Forma Charter was forecasted to generate through 2019 (both with and without the TWC and BHN transactions), based on the forecasts. LionTree calculated terminal values for Pro Forma Charter by applying a range of terminal value multiples of 6.5x to 7.5x to Pro Forma Charter’s 2019 estimated LTM Adjusted EBITDA. The present values of the cash flows and

 

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