Liberty Latin America to acquire Cabletica
Liberty Latin America is to acquire an 80% stake in Cabletica, the Costa Rican cable operator, which has been valued at $250 million.
Cabletica, which is part of Televisora de Costa Rica S.A. (Televisora) will be purchased by Liberty in an all cash transaction and at the time of closing Cabletica is expected to have a net debt of approximately $125 million, while the current owners retain the remaining 20% interest.
Speaking on the acquisition, Balan Nair, president and CEO 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. We look forward to building on Cabletica’s achievements and partnering with its current owners, further investing in enhancing products and services for Cabletica’s customers, while also integrating the business with Liberty Latin America. 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.”
Cabletica offers analogue and digital television, broadband internet and fixed line telephony services to residential customers. In September of last year Cabletica reached approximately 562,000 homes on its hybrid fiber-coaxial network and covering nearly 40% of homes in Costa Rica. In addition, the company served a total of 207,000 customers at the end of September, who subscribed to 327,000 subscription services.
“We are delighted to enter into this agreement and look forward to a long and successful partnership with Liberty Latin America that will deliver many benefits for both our customers and employees, said René Picado, president of Televisora. “We also look forward to further developing the strong content alliance between Cabletica and Televisora and have extended the carriage of exclusive local sports channels TD+ and TD+2 as part of the transaction.”
Liberty Latin America says that it will finance the purchase through a combination of incremental debt borrowings and existing liquidity. The deal excludes Televisora’s existing content assets, which will be retained by Televisora, although some of it will be given to Cabletica on an exclusive basis.
The transaction is due to complete in the second half of 2018 subject to the standard closing conditions and regulatory approvals.
The news comes weeks after C&W Networks announced that it was being spun off into Liberty Latin America. The same month, C&W CEO John Reid left the company shortly after shares in Liberty Latin America begin trading. Speaking exclusively to Capacity president of C&W Networks Paul Scott said that being part of the new entity will create a number of opportunities for the company. To read the full interview please click here.