Liberty Latin America Ltd. (NASDAQ: LILA and LILAK, OTC Link: LILAB), a telecommunications company with operations in Chile, Puerto Rico, the Caribbean and other parts of Latin America, has announced that it has entered into a definitive agreement to acquire 80% of Costa Rican cable operator, Cabletica, which is part of Televisora de Costa Rica S.A. (“Televisora”), in an all cash transaction, the company said.
In the transaction, Cabletica is being valued at an enterprise value of CRC 143 billion (approximately USD 250 million1,2), which equates to a multiple of 6.3x Cabletica´s fiscal year (September 30) 2017 Adjusted EBITDA3 after including projected annual run-rate cost synergies4. At closing, Cabletica is expected to have total net debt of approximately USD 125 million. The current owners of Cabletica will retain the remaining 20% interest.
Cabletica provides analog and digital television, broadband Internet and fixed-line telephony services to residential customers. As of September 30, 2017, the hybrid fiber-coaxial network of Cabletica passed approximately 562,000 homes5 covering nearly 40% of the homes in Costa Rica. Cabletica served a total of 207,000 customers5 at the end of September, who subscribed to 327,000 subscription services5.
Liberty Latin America intends to finance the acquisition of the 80% equity stake in Cabletica through a combination of incremental debt borrowings and existing liquidity. The transaction excludes Televisora´s existing content assets, which will be retained by Televisora, some of which will continue to be provided to Cabletica on an exclusive basis. The transaction is subject to customary closing conditions, including regulatory approvals, and is expected to close during the second half of 2018.
Televisora comprises Cabletica and certain other content assets including Costa Rica´s largest Free-To-Air channel (Canal 7) and the only local sports channel. Televisora was founded in 1958 by the Picado Family and has been a market leader ever since. Today, Televisora is number one in ratings and advertising share in Costa Rica. Following the acquisition, Televisora will retain a 20% stake in Cabletica and full ownership of its content assets, which are not included in the transaction.
Liberty Latin America is a telecommunications company operating in over 20 countries across Latin America and the Caribbean under the consumer brands VTR, Flow, Liberty, MÃ¡s MÃ³vil and BTC. The communications and entertainment services that we offer to our residential and business customers in the region include combinations of services comprised of digital video, broadband Internet, telephony and mobile services. Our business products and services include enterprise-grade connectivity, data center, hosting and managed solutions, as well as information technology solutions with customers ranging from small and medium enterprises to international companies and governmental agencies. In addition, Liberty Latin America operates a sub-sea and terrestrial fiber optic cable network that connects over 40 markets in the region.