Millicom buys Cable Onda for $1 bn to expand in Latin America

Millicom announced the acquisition of 80 percent stake in Cable Onda, a cable and fixed telecommunications services provider in Panama, Latin America.
Millicom Tigo retailThe transaction values Cable Onda at an enterprise value of $1.46 billion, with a cash consideration of $1.002 billion.

The selling shareholders will retain a 20 percent equity stake in the company. The transaction is subject to customary closing conditions and consent from Cable Onda’s bondholders, and it is expected to close by year-end 2018.

Cable Onda is the leader in Panama’s broadband internet, pay-TV, fixed telephony and B2B telecommunications markets, serving more than 500,000 customers using mostly its Hybrid Fibre-Cable (HFC) network.

Cable Onda generated revenue of $195 million and EBITDA of $83 million, for a margin of 42.4 percent for the half-year ended June 30, 2018. Capex of Cable Onda was $46 million in the first half of the year.

The purchase price implies an EV/EBITDA of 7.9x and an EV/OCF of 14.9x based on 2019 management projections for Cable Onda.
Millicom revenue Q2 2018The acquisition of Cable Onda is consistent with the strategy of Millicom for accelerating the deployment of high-speed data networks in Central and South America.

“With the addition of Panama, we have contiguous operations from Guatemala to Colombia, which will significantly enhance our B2B capabilities, given the country’s important role as a business hub for the region,” Mauricio Ramos, CEO of Millicom said.

Millicom will fund the investment with existing cash resources and debt. The company has secured funding commitments from a group of banks. Goldman Sachs has acted as exclusive financial advisor to Millicom for this transaction.

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