Liberty Latin America, the newly split-off unit of Liberty Global focused on Latin America and the Caribbean, has announced an agreement to acquire 80% of Costa Rican cable operator Cabletica.
Cabletica is valued at an enterprise value of around US$250 million dollars, a multiple of 6.3x of its fiscal year EBITDA including projected cost synergies, with current owner Televisora de Costa Rica set to retain the remaining 20% stake at close.
Cabletica provides TV, broadband internet and fixed-line telephony services to residential customers, with its hybrid fiber-coaxial network passing around 562,000 or 40% of the homes in Costa Rica at 30 September. The company served a total of 207,000 customers at the end of September, who subscribed to 327,000 services.
Liberty Latin America added that it intends to finance the all-cash deal acquisition through a combination of incremental debt borrowings and existing liquidity. The transaction is subject to customary closing conditions, including regulatory approvals, and is expected to close during the second half of 2018.
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.”
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.”
Televisora comprises Cabletica and certain other content assets including Costa Rica’s largest Free-To-Air channel (canal) 7. 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.
Liberty Latin America is a leading telecommunications company operating in over 20 countries across Latin America and the Caribbean under the consumer brands VTR, Flow, Liberty, Más Móvil and BTC. In addition, Liberty Latin America operates a sub-sea and terrestrial fiber optic cable network that connects over 40 markets in the region.