Cable & Wireless Communications to buy Columbus International for $1.85 bn

British telecom giant Cable & Wireless Communications Plc (CWC) today struck a deal to buy Columbus International Inc, a privately-held fibre-based telecommunications and technology services provider operating in the Caribbean, Central America and the Andean region, for $1.85 billion.

As part of the acquisition, CWC will also assume Columbus' existing debt of $1.17 billion, taking the total deal price to nearly $3 billion.

CWC will pay $708 million in cash and issue shares to investment vehicles controlled by the two co-founders of Columbus and to US cable television billionaire John Malone, the company's largest minority shareholder.

Post closing, Columbus shareholders will hold about 36 per cent of the larger group (Malone will hold around 13 per cent).

CWC, which operates in 17 countries throughout the Caribbean, Latin America and the Seychelles, estimates that the deal will bring recurring annualised pre-tax cost synergies of approximately $85 million by the financial year 2017/18.

Barbados-based Columbus is a diversified telecommunications and technology services company with approximately 700,000 residential customers in the Caribbean, Central America and the Andean region.

In the Caribbean, it is one of the leading providers of triple-play cable TV and broadband services over its fibre optic network infrastructure.

Through its wholly-owned subsidiary, Columbus Networks, Columbus provides backhaul connectivity to 42 countries in the region, as well as capacity and IT services, corporate data solutions and data centre services throughout the Caribbean, Central America and the Andean region.

For the year ended 31 December 2013, Columbus had revenue of $505 million and operating profit of $104 million.

Phil Bentley, CWC's CEO, said, ''This is a transaction that transforms CWC, providing a step-change in growth and returns. Columbus offers complementary TV, Broadband and B2B capabilities in complementary markets. Together, we will create the best-in- class quad-play offering in the region, delivered on a superior mobile, fibre and subsea network.''