The board of Cable & Wireless Communications (CWC) has agreed to pay a total consideration of USD1.85 billion for 100% of the equity of Columbus International, a privately-owned, Barbados-based telecoms provider. The total will be settled through the payment of approximately USD707.5 million in cash and the distribution of 1.557 billion new ordinary CWC shares to entities ultimately controlled by John Risley (director and co-founder of Columbus), an entity ultimately controlled by John Malone (significant shareholder) and to Brendan Paddick (president, CEO and co-founder of Columbus). CWC has also announced the placing of new shares constituting approximately 9.99% of CWC’s existing share capital, which will be used in part to fund the acquisition.
As a result of the transaction, the board estimates that the enlarged group will be able to achieve recurring annualised pre-tax cost synergies of about USD85 million, which are expected to be delivered in full in the fiscal year 2017/18, and one-time capital expenditure synergies of some USD145 million in the first three years, following the closing of the acquisition, with additional revenue benefits also available.
Columbus, which generated revenue of USD505 million in the year ended 31 December 2013, has around 700,000 residential customers in the Caribbean, Central America and the Andean region. It offers services under the FLOW brand name in Trinidad & Tobago, Jamaica, Barbados, Grenada and Curacao, and also serves Saint Lucia, Saint Vincent & the Grenadines and Antigua & Barbuda under the brand name Karib Cable. Columbus also provides corporate data and cloud based services under the brand Columbus Business Solutions. Meanwhile, through its wholly owned subsidiary, Columbus Networks, the company provides capacity and IP services, corporate data solutions and data centre hosting throughout 42 countries in the greater Caribbean, Central American and Andean region. The telco presides over a fully protected, ringed submarine fibre-optic network spanning close to 42,300km and a 26,400km terrestrial fibre and coaxial network.