BT sells £110m Latin American domestic operations to private equity

BT sells £110m Latin American domestic operations to private equity

Bas Burger.jpg

A private equity group has bought BT’s domestic operations in 16 Latin American countries for an undisclosed sum, a business BT says delivered £110 million revenue in the last financial year.

BT will continue to focus on multinational customers in the region, the company said last night.

The deal includes two fibre networks with total length of 650km, as well as 2,000km of leased fibre lines, four data centres and five teleports. The divested operations are based in in São Paulo, Brazil.

“Today’s announcement is a key milestone in the execution of our strategy to become a more agile and focused business,” Bas Burger (pictured), CEO of Global, BT. His division was formerly known as BT Global Services, but the “services” tag was dropped in 2019.

Burger, who took over the top job in mid-2017, added: “It comes at a particularly challenging time for the global economy. As such, it is a sign of our determination to keep the business moving forward and continue connecting communities, businesses and governments.”

The purchaser – though the deal needs to be approved in all 16 countries – is CIH Telecommunications Americas, an affiliate of CIH Technology Holdings. BT expects completion by the end of 2020.

CIH chairman George Kappaz, a former CEO of Comsat International, said: “We are very excited to be re-entering global telecommunications after having successfully focused on the technology sector over a number of years.”

The countries involved in the deal are Argentina, Brazil, British Virgin Islands, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Peru and Uruguay.

BT pointed out that this week’s Latin American sale was similar to that in Spain in December 2019, when it sold its managed ICT services business, including its domestic network infrastructure, to a private equity firm, Portobello Capital. BT also sold BT Stemmer, based in Germany, in October 2018.

BT confirmed that the transaction is part of its “ongoing transformation of its Global unit” and said it “will deliver continuity and growth opportunities for customers and employees in the region”.

BT and CIH have entered into wholesale and reseller agreements, under which CIH will act as a regional channel for BT’s products and services and continue to supply domestic connectivity services to BT.

. The divested business is headquartered in São Paulo, Brazil.

Kappaz, who is also chairman of Singapore-based software company Astrata, said: “We have considerable experience in the region and the sector, and greatly look forward to growing the business and providing the highest level of service to all customers in the region, including BT. The acquired business fits very well with our strategy and existing global portfolio.”

Burger added: “I am pleased to begin a new chapter in the region with CIH, providing continuity for our people and our customers.”