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AT&T considering sell Puerto Rico operations: Reuters
Posted on Friday, 19 July 2019 09:33
US-based wireless carrier and broadband service provider AT&T is weighing options for its Puerto Rico-based business in a deal that could be worth around USD 3.00 billion, insiders with knowledge of the situation told Reuters.
According to these sources, the Internet-service operator and television content group is exploring ways of reducing debt following the USD 108.70 billion acquisition of Time Warner in 2018.
The company has reportedly hired a financial advisor to assist on the strategic review, which is said to include a sales process; however, the people in the know cautioned there is no guarantee of a deal materialising.
One of the insiders, who asked not to be identified as the situation is still private, added AT&T has a strong market position in Puerto Rico, where it has internet, television, landline and business services and generates annual earnings before interest, taxes, depreciation and amortisation of USD 300.00 million.
The group is said to have already attracted interest from other media companies and private equity firms.
Reuters cited a 2018 report by telecommunications consultancy BuddeCom as saying despite AT&T having a robust presence, the economy in the country has struggled since Hurricane Maria hit in 2017, causing troubles from the US commonwealth’s telecommunications sector.
The company took on USD 23.30 billion-worth of debt when it acquired Time Warner last year and has been seeking ways to reduce this ever since.
One of AT&T’s moves included selling 31 data centres to Brookfield Infrastructure Partners for USD 1.10 billion earlier this year, as well as Netflix-rival Hulu buying back a 9.5 per cent stake from the business for USD 1.43 billion in April.
During the opening three months of 2019, the company generated adjusted earnings before interest, taxes, depreciation and amortisation of USD 14.80 billion on revenue of USD 44.83 billion.
Should a deal go ahead, it would make it the first to feature a Puerto Rican target announced in 2019 to date, according to Zephyr, the M&A database published by Bureau van Dijk.
There were only two such transactions signed off last year, these included Dorado Health buying Hospital Hermanos Melendez and Puerto Rico Children’s Hospital for USD 150.00 million and Strattam Capital Management picking up a majority stake in Rock Solid Technologies for an undisclosed amount.
© Zephus Ltd