Regional operator Cable & Wireless Communications (CWC) announced today that it has come to an agreement to sell its subsidiary Cable & Wireless Bermuda to the Canadian Bragg Group for US$70m.
CWC also announced a share buyback programme of up to US$100m…
Regional operator Cable & Wireless Communications (CWC) announced today that it has come to an agreement to sell its subsidiary Cable & Wireless Bermuda to the Canadian Bragg Group for US$70m.
CWC also announced a share buyback programme of up to US$100m so as to return capital to its shareholders.
The Bragg Group, which operates under the Eastlink brand, will pay the US$70m in cash. The US$70m represents a multiple of 6.5x 2009/2010 EBITDA.
The deal is still subject to governmental and regulatory approval, but is expected to be completed in March.
In a statement, CWC said that the divestment was consistent with its strategy of developing its business around full-service telecommunications operations in a series of core regional hubs.
Cable & Wireless Bermuda is an international gateway business that provides data capacity, carrier, internet and international direct dialling (IDD) services. It also provides data centre services and also partially owns another Bermudan local network provider.
CWC’s CEO Tony Rice said that this divestment, along with the acquisition of a stake in the Bahamas Telecommunications Company (BTC), represented the first steps in the reshaping of the group that was announced after its demerger from Cable & Wireless Worldwide in 2010.
Rice said: “Bermuda does not fit our business model as it is not a full-service operation while BTC provides excellent opportunities and a strong strategic fit with our Caribbean business. The US$70 million consideration represents an excellent return on our long-term investment in Bermuda.”
CWC told TelecomFinance that most of the work for the deal was done in-house. The legal adviser was in-house, along with a Bermudan legal counsel providing advice.
