The business was spun off from Liberty Global in 2018. Markets have reacted positively, with Liberty Latin America stocks up by nearly 3% following the announcement.
A statement from Liberty said that the acquisition will provide consumer mobile and B2B services in Puerto Rico – a country where the operator already has a large presence – and the US Virgin Islands, excluding DIRECTV customers.
Puerto Rico assets represent approximately 90% of the revenue of the assets to be acquired. In the country, AT&T’s LLA is the leading provider of mobile services. The US operator will support LLA for a period of up to 36 months, under the terms of the agreement, in order to successfully transition services to Liberty.
Liberty promises that consumers will still be delivered free roaming services between Puerto Rico, the US Virgin Islands and the mainland United States, Mexico and Canada.
The transaction is subject to customary closing conditions, including reviews by the United States Federal Communications Commission and the Department of Justice. Liberty says that it expects the transaction to close in Q2 2020.
Balan Nair, president and CEO of Liberty Latin America, said: “This strategic and complementary acquisition is an exciting and unique opportunity to expand our business in one of our best markets. This acquisition is at an attractive valuation, in the mid-6s in terms of EV to OCF excluding synergies, and consistent with our disciplined approach towards M&A. With this combination, we will achieve: in-market consolidation with significant associated synergies, expand our product portfolio with the leading post-paid mobile network, add a predominantly subscription-based business, increase our distribution channels on the island, increase our B2B presence and materially increase our US dollar revenue weighting at LLA.”
“The combination of AT&T’s leading mobile businesses with Liberty Puerto Rico’s leading high-speed broadband and TV business will create a strong and competitive integrated communications player, with a combined annual revenue of over US$1.2 billion in Puerto Rico and US$4.6 billion across LLA. By continuing to invest in digital infrastructure, innovation, 5G networks and a friendly customer service experience, we are confident that this new combination will support our long-term growth profile and that this deal will be free cash flow accretive on a per share basis.”
Jose J. Davila, VP-general manager for AT&T in Puerto Rico and the U.S. Virgin Islands said: “I’m proud of what our team has built in this region. We look forward to joining Liberty Latin America to continue to deliver a superior experience for our valued customers here. And our committed and talented team will bring a wealth of experience to Liberty Latin America and continue to build on our success in Puerto Rico and the US Virgin Islands.”
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17 September 2021 @ 19:30:00 UTC