Cable & Wireless Communications (CWC), the Caribbean and Central American telecoms operator, has agreed a deal to buy Columbus International, a fibre-based telecoms provider backed by US cable TV billionaire John Malone, for $1.85bn (£1.13bn).
The FTSE 250-listed firm said the huge deal, which was worth nearly as much as CWC’s entire £1.14bn market valuation, would unlock new opportunities for growth in the region.
“It’s a game changer for us because there’s nothing else of that scale that we could buy, and there’s nothing that fits so well with TV, broadband and our mobile networks,” chief executive Phil Bentley told City A.M.
“It”s a great fit for us and we think together we can grow faster. We have a bigger customer base, but they’ve got IP technology for TV, and we’ve already worked together in a joint venture.”
CWC also announced a share placing, constituting 9.99 per cent of its current share capital to part-finance the deal, which includes the assumption of Columbus’ existing net debt, which was $1.17bn at 30 June 30.
Although CWC said the deal, which it had been working on for the past year, would be earnings neutral in the first year after the acquisition and add to earnings after that, shares fell 7.44 per cent to 45.30p yesterday.
Separately, CWC said that its first-half revenue rose for the first time since the group was demerged from the former Cable & Wireless in 2010.
Demand for mobile broadband helped to lift revenue by a per cent to $848m and profit jumped from $17m to $132m.
BEHIND THE DEAL
EVERCORE | BERNARD TAYLOR
1 Taylor is an experienced mergers and acquisitions banker who was chief of Braveheart until it was bought by Evercore in 2006
2 His current role is chairman of Evercore’s European investment banking operation, previously he was chief executive of the same division and a senior managing director of the firm.
3 Deals to his name include guiding Wellcome Trust through its acquisition by drugs giant GlaxoSmithKline and advising Dresdner Bank on its offer for Kleinwort Benson.
Taylor worked alongside the senior managing director of Evercore’s corporate advisory business, Julian Oakley, on the deal as both financial adviser and sponsor. Maitland handled financial PR for the transaction with a team led by chief executive Neil Bennett.