Cable & Wireless Communications (CWC) has agreed to buy telecoms and technology services provider Columbus International for US$1.85bn to expand in the Caribbean, Central America and Andean region.
CWC will also take on Barbados-based Columbus’ net…
Cable & Wireless Communications (CWC) has agreed to buy telecoms and technology services provider Columbus International for US$1.85bn to expand in the Caribbean, Central America and Andean region.
CWC will also take on Barbados-based Columbus’ net debt, which totalled US$1.17bn at the end of June, the telecoms giant said in a statement.
CWC will fund the US$1.85bn consideration with about US$707.5m in cash, 1.56 billion new shares, representing nearly 10% of the group’s outstanding share capital, and additional debt of about US$2.93bn.
The new shares will be sold to entities controlled by Columbus co-founder and director John Risley, to a unit owned by US media mogul John Malone and to Columbus co-founder and CEO Brendan Paddick. The principal sellers will therefore own about 36% of the enlarged group’s ordinary shares.
CWC CEO Phil Bentley described the deal as transformative for the group, saying it will provide a step-change in growth and returns.
“Columbus offers complementary TV, broadband and B2B capabilities in complementary markets. Together we will create the best-in-class quad-play offering in the region, delivered on a superior mobile, fibre and subsea network.”
JP Morgan has provided debt financing commitments for the purchase. Specifically, these include a US$460m senior secured two-year bridge facility, a US$300m senior unsecured two-year bridge facility, a US$404m senior secured two-year bridge facility, a US$1.26bn senior unsecured one-year bridge facility and a US$500m senior secured revolving credit facility.
The US$460m and US$300m facilitates will part-fund the cash consideration, while the RCF will be used to refinance existing RCFs entered into by CWC subsidiary SIFL as borrower, to pay relevant fees and costs and for working capital purposes. The US$404m facility will be used to fund any acceptances by SIFL bondholders in the event that New CWC is established as a holding company for CWC. Meanwhile, the US$1.26bn facility will fund any acceptances by Columbus bondholders.
The parties expect the deal to complete in the first quarter of 2015, subject to relevant approvals.
The CWC board predicts that the enlarged group will generate recurring annual pre-tax synergies of about US$85m, expected to be delivered in full in 2017-18, and one-time capital expenditure synergies of US$145m in the three financial years following the closing of deal.
CWC claims to provide 5.7 million residential customers in the Caribbean, Latin America and the Seychelles with mobile and fixed telephony, high-speed broadband and pay TV services.
Meanwhile, Columbus says it serves 700,000 residential customers in the Caribbean, Latin America and Andean region. It claims to be one of the Caribbean’s leading providers of triple-play cable TV and broadband-enabled services using its fibre-optic network infrastructure. The company also provides backhaul connectivity to 42 countries in the region via its Columbus Networks unit, as well as capacity and IT services, corporate data solutions and data centre services. In addition, it offers connectivity, IT, managed networking and cloud-based services under the Columbus Business Solutions brand.
Columbus posted revenues of US$505m for 2013, EBITDA of US$216m and total operating profit of US$104m.
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