Cheddar News Parent Altice USA In Talks To Offload News Service To Private Equity: CNBC

Altice USA, Inc ATUS stock is trading lower Monday amid reports of the company discussing selling the financial news streaming service Cheddar News to L.A.-based private equity firm Regent LP.

Altice USA and Regent are discussing a potential transaction for Cheddar, where no initial cash exchange would occur. Instead, Altice USA would participate in Cheddar's future performance through an "earn-out" structure. 

If Cheddar achieves specific performance targets, Altice USA could receive future proceeds approximately amounting to $50 million, based on internal projections, CNBC reports.

Cheddar, a business news streaming service targeting millennials, was founded in 2016 by Jon Steinberg. Altice USA acquired it for $200 million in 2019.

Dexter Goei, then CEO of Altice USA, praised Steinberg's ability to grow Cheddar and its advertising revenue. Steinberg remained with Altice USA post-acquisition before leaving in early 2022, and Goei stepped down as CEO later that year.

Since the acquisition, Altice USA, the fourth-largest U.S. cable provider, has experienced a significant stock price drop, nearly 60% this year, amid profit and revenue declines due to losses in high-speed broadband. 

The company had also considered selling its cable asset, Suddenlink, but abandoned these plans in late 2022.

In November, Altice USA reported a third-quarter revenue decline of 3.2% year-on-year to $2.32 billion, beating the consensus of $2.29 billion. EPS of $0.15 beat the consensus of $0.06.

Price Action: ATUS shares traded lower by 4.65% at $2.05 on the last check Monday.