Millicom buying Cable Onda in Panama
Millicom is acquiring a controlling 80% stake in Cable Onda, a cable operator in Panama. The transaction values 100% of Cable Onda at an ...
Millicom is acquiring a controlling 80% stake in Cable Onda, a cable operator in Panama. The transaction values 100% of Cable Onda at an enterprise value of $1.460 billion, with a cash consideration of approximately $1.002 billion (subject to customary adjustments). The selling shareholders will retain a 20% equity stake in the company. The transaction is subject to customary closing conditions and consent from Cable Onda's bondholders, and it is expected to close by year-end 2018.
Cable Onda provides broadband Internet, pay TV, fixed telephony and B2B telecommunications to more than 500,000 customers via its hybrid fiber/coax (HFC) network. For the half-year ended June 30, Cable Onda generated revenue of $195 million. Capex for the period was $46 million.
Mauricio Ramos, CEO of Millicom, said: "Our acquisition of Cable Onda is consistent with our strategy of accelerating the deployment of high-speed data networks in Central and South America. With the addition of Panama, we now have contiguous country operations from Guatemala to Colombia, which will significantly enhance our B2B capabilities, given the country's increasingly important role as a business hub for the region. We are excited about expanding to Panama, an investment-grade country with a diversified, dollarized, and robust economy. Disposable income levels in Panama are now among the highest in Latin America, yet penetration rates for digital services remain comparatively low. We look forward to working with our strong local partners to extend the company's market leadership and bring digital lifestyle services to even more Panamanians and contribute to the ongoing socio-economic development of the country."
Nicolas Gonzalez Revilla, CEO of Cable Onda, said: "For the past two decades, the dedicated employees of Cable Onda have built a world-class organization capable of competing, and winning, against some of the largest telecom service providers in the world. This is a true Panamanian success story that we can all be proud of, and this is also something that we have in common with Millicom, the clear leader in most of its markets. We are excited to partner with Millicom for this next step in Cable Onda's journey."
Millicom will fund the investment with existing cash resources and new debt, and the company has secured funding commitments from a group of banks to help finance the acquisition.
As part of the transaction, Millicom and the selling shareholders have entered into a shareholder agreement which, among other items, grants to Millicom the right to acquire and to the selling shareholders the right to sell the remaining 20% of Cable Onda's equity.