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Liberty Latin America to acquire majority stake in Cabletica
Posted on Tuesday, 13 February 2018 14:07
Liberty Latin America, one of the largest telecommunication providers in South America, has agreed to take an 80.0 per cent stake in Costa Rican cable company Cabletica for CRC 143.00 billion (USD 245.72 million) in cash.
The deal values the target, which is part of Televisora de Costa Rica, at 6.3x its 2017 adjusted earnings before interest, taxes, depreciation and amortisation, after including annual run-rate cost synergies.
Cabletica’s current owners will continue to hold the remaining 20.0 per cent interest and manage the group’s USD 125.00 million debt load.
Liberty Latin America, the new unit of Liberty Global, which was spun off to focus on Latin America and the Caribbean, plans to finance the all-cash acquisition through a combination of incremental debt borrowings and existing liquidity.
The transaction excludes Televisora’s existing content assets, although some will continue to be provided to the target on an exclusive basis following closing, expected during the second half of 2018, subject to regulatory approvals.
Cabletica provides television, broadband internet and fixed-line telephony services to residential customers with its hybrid network in 562,000 homes, covering around 40.0 per cent of the Costa Rican island, at the end of September 2017.
At the same time, the company served a total of 207,000 customers that signed 327,000 subscription services, according to the press release.
Balan Nair, chief executive of Liberty Latin America, said: “The acquisition of a leading cable operator in Costa Rica is an exciting move as it adds further scale to our growing platform and diversifies us into one of the region’s most attractive markets.
“This transaction is a prime example of our consolidation ambitions, leveraging our unique subsea and terrestrial footprint, in a region that remains highly fragmented and continues to be both underpenetrated and underserved by high-speed data services.”
The deal is Liberty Latin America’s first since being split off from Liberty Global in December in an initial public offering which raised USD 9.29 billion. The company had a market capitalisation of USD 3.80 billion yesterday.
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