  Telefonica
Movistar is one of Costa Rica’s largest mobile service
providers. / A.M. Costa Rica wire services
photo.
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 Published Friday, July 31, 2020 Movistar
Costa Rica sells
for $500 million By the A.M.
Costa Rica staff and wire services
On Thursday, Colorado, USA based Liberty Latin America Ltd, former know as Liberty Media, announced a definitive agreement to acquire Telefónica S.A.’s wireless operations in Costa Rica, known as Telefónica Costa Rica branded as Movistar. According to Liberty, the company that also owns 80% of the Cable Tica brand. Telefonica is one of Costa Rica’s largest mobile service providers. The all-cash transaction values Telefónica Costa Rica at an enterprise value of $500 million on a cash and debt-free basis. “We have had great success in Costa Rica through our 2018 investment in 80%-owned Cabletica, a leading fixed-provider in the country and one of LLA’s fastest growing businesses, and are excited to increase our investment in the country, " said Balan Nair, President and CEO of Liberty Latin America." Telefónica Costa Rica has deliver-fastest-growing performance, including high single-digit top-line growth and strong double-digit Adjusted OIBDA growth from 2017-20193." According to Nair, combined with Cabletica, Liberty looks forward to creating a leading integrated communications player providing customers in Costa Rica with high-quality value propositions and unparalleled customer service. "This transaction comes at an attractive valuation, consistent with our disciplined approach towards M&A," he said. Telefónica Costa Rica is the country’s second-largest mobile service provider. As of June 30, 2020, the business had 2.3 million subscribers. Its mobile network currently has approximately 90% LTE population coverage. According to Liberty Latin America, the goal for Telefónica Costa Rica to become part of the VTR credit pool, which will also include Cabletica, and to finance the acquisition, including fees and expenses, with incremental local borrowings and borrowings at VTR Finance N.V., targeting approximately 4x debt on the acquired asset’s Adjusted OIBDA. The remaining funding is anticipated to come from LLA liquidity including future free cash flow generation, as well as other forms of debt and/or equity capital. The transaction is subject to certain customary closing conditions, including regulatory approvals, and is expected to close in the first half of 2021. Advisory and financing services to Liberty Latin America on the transaction have been provided by JP Morgan, LionTree and Scotiabank. However, the final approval of the sales agreement is in charge of the Telecommunications Superintendence of Costa Rica (Sutel). It is expected that Sutel reports the approval or disapproval of this trade next week. This is the second U.S. company has acquired a Costa Rican company since June.  Wisconsin- based Johnson Controls, acquired Termo Aire, a Costa Rican engineering consulting company that offered services to more than 20 countries throughout Latin America and the Caribbean, announced the Costa Rican Investment Promotion Agency, CINDE. According to CINDE, the deal expands the Johnson Controls Sales Support Center of Excellence (CoE) global network of 1,600 employees. This will also leverage Termo Aire’s mechanical, electrical, plumbing and fire protection capabilities as well as its team of more than 40 employees with experience in energy consulting and other specialized engineering services. “I am pleased to announce that the Johnson Controls Sales Support CoE Network has completed the acquisition process of Termo Aire, a leading provider of MEP services in Costa Rica, with operations in Mexico and Panama,” said Daryl Haga, Vice President, Global Centers, Sales Support, Johnson Controls. “This merger with Termo Aire further strengthens our Center of Excellence network and our position in the MEP market.” With more than 30 years of operation, Termo Aire has provided services in sectors like Hospitality, Retail, Office & Financial, Multifamily & Residential, Industrial, Free Trade Zones and Data Centers, said CINDE. The Circuito CoE of Johnson Control and Termo Aire started their business relationship in 1996. “As with all important business decisions, we will work closely with our clients, partners, and employees to make the integration process as smooth as possible,” Haga said. “Our greatest assets have always been our people and by joining forces we have an even better future together.” ---------------------- What other international company should invest in Costa Rica? We would like to know your thoughts on this story. Send your comments to news@amcostarica.com |
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