Liberty Global plc (“Liberty Global”) (NASDAQ: LBTYA, LBTYB and LBTYK)
today announced that, together with investment funds affiliated with
Searchlight Capital Partners, L.P. (collectively, “Searchlight”), it has
entered into an agreement to acquire 100% of the parent of Puerto Rico
Cable Acquisition Company Inc., dba Choice Cable TV (“Choice”), the
second largest cable and broadband services provider in Puerto Rico.
Choice’s operations will be combined with Liberty Cablevision of Puerto
Rico LLC (“LCPR”) and the combined business, which will be 60%-owned by
Liberty Global and 40%-owned by Searchlight, will be the largest cable
operator on the island. At August 31, 2014, Choice’s network passed
approximately 345,000 homes and served approximately 154,000 revenue
generating units (“RGUs”).1
Mike Fries, CEO of Liberty Global, stated, “The Choice transaction will
build upon our 2012 acquisition of OneLink and will complete cable
consolidation on the island of Puerto Rico. Going forward, our
market-leading bundles and commitment to network investment and
innovation will meaningfully enhance the products and services available
to Choice customers. Upon completion, our network will reach over 80% of
Puerto Rican homes, and the combined business will serve more than
700,000 RGUs and generate over $380 million of annual revenue.
Additionally, this will be the first new asset in our anticipated
tracking stock for our businesses in Latin America and the Caribbean.”
Eric Zinterhofer, co-founder of Searchlight, said, “We are excited about
the opportunity to bring next-generation video capability and enhanced
broadband services to Choice’s customers. Furthermore, through the
creation of an island-wide cable operator, there are significant
opportunities to drive scale benefits and develop incremental
residential and commercial business opportunities in Puerto Rico.”
This transaction values Choice at an enterprise value, before
transaction costs, of approximately $272.5 million. This equates to a
multiple of 6.1 times our estimate of Choice’s 2015 full-year operating
cash flow, as customarily defined by Liberty Global and adjusted for the
projected annual impact of synergies following full integration. Liberty
Global expects to attribute its 60% interest in the combined company to
its new tracking share group, the Liberty Latin America and Caribbean
Group, or “LiLAC Group”, once the tracking share proposal is approved by
Liberty Global shareholders and completed.
The purchase price is expected to be substantially funded through
incremental debt borrowings at the combined Puerto Rican business. The
transaction is subject to customary closing conditions, including
regulatory approvals, and is expected to close in the first half of
2015. LionTree Advisors acted as financial advisor in the transaction.
Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including the anticipated timing of closing the transaction, regarding
our expectations with respect to Choice’s 2015 operating cash flow and
post-acquisition synergies, the impact of the transaction on the
combined company’s operations and financial performance, with respect to
the creation of the LiLAC Group and other information and statements
that are not historical fact. These forward-looking statements involve
certain risks and uncertainties that could cause actual results to
differ materially from those expressed or implied by these statements.
These risks and uncertainties include the receipt and timing of
necessary regulatory approvals to complete the acquisition, Choice’s
ability to continue financial and operational growth at historic levels,
continued use by subscribers and potential subscribers of Choice’s
services, our ability to achieve expected operational efficiencies,
synergies and economies of scale, and the receipt and timing of
necessary approvals relating to the creation of the LiLAC Group, as well
as other factors detailed from time to time in Liberty Global’s filings
with the Securities and Exchange Commission including its most recently
filed Forms 10-K/A and 10-Q. These forward-looking statements speak only
as of the date of this release. Liberty Global expressly disclaims any
obligation or undertaking to disseminate any updates or revisions to any
forward-looking statement contained herein to reflect any change in
Liberty Global’s expectations with regard thereto or any change in
events, conditions or circumstances on which any such statement is based.
About Liberty Global
Liberty Global is the world’s largest international cable company with
operations in 14 countries. We connect people to the digital world and
enable them to discover and experience its endless possibilities. Our
market-leading services are provided through next-generation networks
and innovative technology platforms that, when combined with those of
Ziggo N.V., connected 27 million customers subscribing to 56 million
television, broadband internet and telephony services at September 30,
2014.
Liberty Global's consumer brands include Virgin Media, UPC, Ziggo,
Unitymedia, Kabel BW, Telenet and VTR. Our operations also include
Liberty Global Business Services, our commercial division, and Liberty
Global Ventures, our investment fund. For more information, please visit www.libertyglobal.com
or contact:
Investor Relations:
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Corporate Communications:
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Oskar Nooij
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+1 303 220 4218
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Marcus Smith
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+44 20 7190 6374
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Christian Fangmann
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+49 221 8462 5151
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Bert Holtkamp
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+31 20 778 9800
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John Rea
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+1 303 220 4238
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Hanne Wolf
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+1 303 220 6678
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About Searchlight Capital Partners, L.P.
Searchlight is a global private investment firm with offices in New
York, London and Toronto. Searchlight seeks to invest in businesses
where its long term capital and strategic support accelerate value
creation for all stakeholders. For more information, please visit www.searchlightcap.com.
For further information please contact:
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Emily Melchior
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+ 1 212 293 3717
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Additional Information and Where to Find It
Nothing in this press release shall constitute a solicitation to buy or
subscribe for or an offer to sell any securities of Liberty Global,
including Liberty Global’s proposed new LiLAC Group tracking shares. The
issuance of the new LiLAC Group tracking shares will only be made
pursuant to an effective registration statement. In connection with the
proposed issuance of the LiLAC Group tracking shares, Liberty Global has
filed a registration statement on Form S-4 with the SEC. SHAREHOLDERS OF
LIBERTY GLOBAL ARE URGED TO READ THE REGISTRATION STATEMENT AND THE
PROXY STATEMENT/PROSPECTUS CONTAINED THEREIN (INCLUDING ANY AMENDMENTS
OR SUPPLEMENTS THERETO) BECAUSE THEY CONTAIN IMPORTANT INFORMATION.
Shareholders can obtain a free copy of the registration statement
including the proxy statement/prospectus contained therein, as well as
other filings containing information about Liberty Global, without
charge, at the SEC's internet site (http://www.sec.gov).
Copies of the registration statement and other filings by Liberty Global
with the SEC that are incorporated by reference therein can also be
obtained, without charge, by directing a request to Liberty Global plc,
12300 Liberty Boulevard, Englewood, CO 80112, USA, Attention: Investor
Relations.
Participants in a Solicitation
The directors and executive officers of Liberty Global and other persons
may be deemed to be participants in the solicitation of proxies in
respect of proposals relating to the approval of the issuance of the
LiLAC Group tracking shares. Information regarding the directors and
executive officers of Liberty Global and other participants in the proxy
solicitations and a description of their respective direct and indirect
interests, by security holdings or otherwise, is contained in Liberty
Global’s proxy statement filed with the SEC on April 30, 2014.
1
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All homes passed and RGU figures for Choice are as of August 31,
2014 and are based on information provided by Choice. LCPR RGU
figures are as of September 30, 2014.
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