The Caribbean fiber market saw a significant consolidation event yesterday. Cable & Wireless Communications has agreed to purchase Columbus International for $1.85B, with one of telecom's billionaires taking a hand in the deal.
CWC will be issuing 1.5B new shares to fund the $707.5M cash part of the deal, with the rest to be raised from the debt markets. Cable's John Malone owns some 22% of Columbus, and after this deal he will own some 13% of the combined company.
Columbus operates submarine cables connecting much of the Caribbean to North, South, and Central America, as well as a last mile bandwidth and consumer pay-TV business reaching 700K subscribers. The two companies had overlapping territories in six countries. CWC has big upgrade plans to its markets in the region, and the new fiber connectivity is going to require a lot of subsea bandwidth. They were already partners in the ownership of submarine cable in the region, and this deal brings it all under one roof.
CWC expects to extract $85M in annualized operating synergies over the next few years, as well as $145M in capex over that time period, spending some $110M in integration costs.
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