Telefónica Colombia has closed on a deal with US buyout firm KKR to spin off Telefonica’s Colombian fiber optic network into an independent company. Telefónica’s Colombian subsidiary will maintain a 40% stake in the new company, with the deal valued at $500 million USD; 20 times OIBDA, and approximately $410 per connected household (Real Estate Units).
Telefónica Colombia received a payment of $200 million USD and anticipates an additional performance-based payment of $100 million USD. This new partnership will operate as a neutral wholesale company, prepared to operate and accelerate local fiber optic network deployments, as well as offer wholesale access for the FTTH business to all telecommunications service providers in Colombia that, in turn, offer services to their end customers.
By spinning off the fiber assets into a separate company, Telefónica and KKR hope to serve as a neutral infrastructure provider to other telecom operators that otherwise would compete with Telefónica’s Movistar brand in Colombia.
Alfonso Gómez Palacio, CEO of Telefónica Hispanoamérica, points out: “It has been only six months before the closing of this operation, which demonstrates the speed of execution of our team. With this new company, the market will have a very vibrant year in the expansion of fiber optic networks, which will undoubtedly take advantage of Movistar Colombia to continue leading the connection speed for homes and companies.”
Laura Abasolo, Managing Director of Finance and Control of Spain-based Telefónica S.A. and head of Telefónica Hispanoamérica, added: “We continue to proactively manage assets in Latin America, creating value and modulating exposure in the region. The model we promote strengthens our state-of-the-art infrastructure and provides flexibility in the use of capital.”