Liberty Latin America Ltd. announced that its subsidiary Cable & Wireless Panamá, which is 49% owned, has agreed to acquire Claro Panamá's operations, which are owned by América Móvil. The all-cash transaction values Claro Panamá at an enterprise value of USD 200 million on a cash- and debt-free basis. This equates to a mid-single digit acquisition multiple of Claro Panamá’s fiscal year 2020 Adjusted OIBDA, including projected annual run-rate synergies.
"We are delighted to further increase our commitment to Panama through today’s announced acquisition of Claro Panamá. The integrated business will operate over a network with extensive coverage and invest to deliver innovative mobile products and services for Panamanian consumers and B2B customers, including via leading technologies such as 5G," commented Balan Nair, President and CEO of Liberty Latin America. "We at Liberty Latin America have established our group Operations Center in Panama and see the country as an important digital hub for the region, which we expect to drive growing demand for our full suite of mobile and fixed connectivity solutions. The valuation for the acquisition is consistent with our disciplined approach towards M&A and will be free cash flow accretive on a per share basis.”
For the most recent fiscal year ended December 31, 2020, Claro Panamá generated USD 157 million of revenue and as of June 30, 2021, the business had 760 thousand mobile subscribers.
The acquisition (including fees and expenses) is intended to be financed using cash and incremental borrowings at Cable & Wireless Panamá. Completion of the transaction is subject to certain customary closing conditions, including regulatory approvals, and is expected to close in the first half of 2022.