Liberty Latin America to buy 80% of Costa Rica's Cabletica

Monday, February 12th, 2018
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Liberty Latin America to Acquire Controlling Interest in Cabletica

  • Acquisition of 80% stake in leading Costa Rican cable operator
  • Continued investment & innovation to benefit Cabletica’s customers
  • Leveraging Liberty Latin America’s regional scale to drive synergies

DENVER, Colorado — Liberty Latin America Ltd. (“Liberty Latin America”) (NASDAQ: LILA and LILAK, OTC Link: LILAB), a leading telecommunications company with operations in Chile, Puerto Rico, the Caribbean and other parts of Latin America, today 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. In the transaction, Cabletica is being valued at an enterprise value of CRC 143 billion (approximately $250 million), which equates to a multiple of 6.3x Cabletica’s fiscal year (September 30) 2017 Adjusted EBITDA after including projected annual run-rate cost synergies. At closing, Cabletica is expected to have total net debt of approximately $125 million. The current owners of Cabletica will retain the remaining 20% interest.

Balan Nair, President and CEO of Liberty Latin America, commented, “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 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 homes covering nearly 40% of the homes in Costa Rica. Cabletica served a total of 207,000 customers at the end of September, who subscribed to 327,000 subscription services.

René Picado, President of Televisora, said, “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. 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 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.