Liberty Global has teamed up with private equity group Searchlight Capital Partners to acquire 100% control of the parent company of Puerto Rico Cable Acquisition Company, also know as Choice Cable TV, the second largest cable and broadband player on the island.
Choice’s operations will be combined with Liberty Global’s existing asset, Liberty Cablevision of Puerto Rico, and the combined business, which will be 60%-owned by Liberty Global and 40%-owned by Searchlight, will be the largest cable operator on the island. At the end of August, Choice’s network passed about 345,000 homes and had about 154,000 revenue-generating units.
The deal values Choice at about US$272.5 million (€220 million), about 6.1 times Liberty’s estimate of its 2015 full-year operating cashflow.
“The Choice transaction will build upon our 2012 acquisition of OneLink and will complete cable consolidation on the island of Puerto Rico. Going forward, our market-leading bundles and commitment to network investment and innovation will meaningfully enhance the products and services available to Choice customers,” said Liberty Global president and CEO Mike Fries.
“Upon completion, our network will reach over 80% of Puerto Rican homes, and the combined business will serve more than 700,000 RGUs and generate over US$380 million of annual revenue. Additionally, this will be the first new asset in our anticipated tracking stock for our businesses in Latin America and the Caribbean.”
Liberty Global announced its intention to spin off its Latin American and Caribbean business on the release of its third quarter results earlier this year. The Liberty Latin America and Caribbean Group (LiLAC) will incorporate Liberty Global’s 60% share in the new combined entity once the tracking share proposal is approved by Liberty Global shareholders and completed. The acquisition of Choices is expected to close in the first half of next year.
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