C&W Communications has reached an agreement to acquire privately owned fiber provider Columbus for $1.85 billion, a deal that it says will expand its presence in the Caribbean, Central America and Andean region with new consumer business service capabilities.
In funding the acquisition, C&W is planning a share placement of 9.99 percent of outstanding share capital.
C&W said that the acquisition will be earnings neutral in the first year after it is completed, but will materially enhance its earnings going forward.
By bringing Columbus into its fold, C&W said that it is expected to achieve recurring annualized pre-tax cost synergies of around $85 million, delivered in full in the 2017-2018 financial year, and one-time capital expenditure synergies of $145 million in the first three financial years following completion, with additional revenue benefits.
Besides establishing what it calls an Enlarged Group with greater regional presence, the acquisition of Columbus will accelerate its four areas of focus: mobile services, fixed-mobile convergence, additional TV markets and customers, and growing its B2B and B2G offerings. In addition, the deal will strengthen its management team.
"This is a transaction that transforms CWC, providing a step-change in growth and returns," said Phil Bentley, CWC's CEO, in a release. "Columbus offers complementary TV, broadband and B2B capabilities in complementary markets."
Barbados-based Columbus today serves 700,000 residential customers in the regions where it operates. The service provider delivers triple-play cable TV and broadband services as well as backhaul connectivity to 42 countries in the region, as well as capacity and IT services.
- see the release (.pdf)
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