Liberty Latin America’s $250 Million Acquisition of a Controlling Interest in Cabletica


EY Law, DLA Piper and Consortium Legal advised on the deal

Liberty Latin America Ltd. (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, 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., in an all cash transaction. In the transaction, Cabletica is being valued at an enterprise value of CRC 143 billion (approximately $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 $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.

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. The company, led by Michael T Fries, Balan Nair and Christopher Noyes, in 2017 recorded $3.59 Billion Revenues.

EY Law advised Liberty Latin America Ltd. with Hernán Pacheco (Picture) and Ana Sáenz.

DLA Piper advised Televisora de Costa Rica S.A. with Francisco J. Cerezo, John Murphy, Louis Ramos, Mélisande Brodeur-Perez, Joseline Rodríguez-Ortiz, Harout Jack Samra, Julie A. Gryce and Irma Isabel De Obaldia.

In San José Consortium Legal advised Televisora de Costa Rica S.A. with Rolando Laclé Z., Juan Manuel Godoy, Diego Salto and Monserrat Segura.

Involved fees earner: Rolando Lacle Castro – Consortium – Legal; Juan Manuel Godoy – Consortium – Legal; Diego Salto – Consortium – Legal; Monserrat Segura M. – Consortium – Legal; Hernán Pacheco – EY Law; Ana Sáenz – EY Law; Francisco Cerezo – DLA Piper; John Murphy – DLA Piper; Mélisande Brodeur-Perez – DLA Piper; Joseline Rodriguez-Ortiz – DLA Piper; Louis Ramos – DLA Piper; Harout Jack Samra – DLA Piper; Irma Isabel De Obaldia – DLA Piper; Julie Gryce – DLA Piper;

Law Firms: Consortium – Legal; EY Law; DLA Piper;

Clients: Liberty Latin America Ltd; Televisora de Costa Rica S.A.;

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Author: Ambrogio Visconti.