Liberty Global, Inc. (“Liberty Global,” “LGI,” or the “Company”) (NASDAQ: LBTYA, LBTYB and LBTYK) today announced that its subsidiary, LGI Broadband Operations, Inc., has entered into an agreement, together with investment funds affiliated with Searchlight Capital Partners, L.P. (collectively, “Searchlight”), to acquire 100% of the parent of San Juan Cable, LLC, dba OneLink Communications (“OneLink”). OneLink will be merged with LGI’s existing operation, Liberty Cablevision of Puerto Rico LLC (“LCPR”), to form the largest cable operator on the island. At March 31, 2012, OneLink passed 347,000 homes and served approximately 262,500 revenue generating units (RGUs). 1
Mike Fries, President and Chief Executive Officer of Liberty Global stated, “Consistent with our strategy of consolidating markets within our footprint, this transaction will make us the leading provider of cable services in Puerto Rico, passing approximately 70% of the cable homes on the island and adding substantial scale to our existing operation. As a leader in innovation in Puerto Rico, particularly in high-speed broadband and HD, we aim to bring that expertise to the OneLink business. On a combined basis, we will have approximately 700,000 homes passed and 480,000 RGUs, generating nearly $300 million in pro forma 2011 revenue. Finally, we are excited about working together with Searchlight and driving value to our respective stakeholders.”
Eric Zinterhofer, co-founder of Searchlight said, "There is clear strategic logic to this transaction, which will enhance the combined company's ability to offer high-quality communications services throughout Puerto Rico. Liberty Global is a best-in-class operator, and we look forward to being their partner on this exciting transaction."
This transaction values OneLink at an enterprise value, before transaction costs, of approximately $585 million. This equates to a multiple of approximately 6.3 times our estimate of OneLink’s 2012 operating cash flow, as customarily defined by Liberty Global and adjusted for the projected annual impact of synergies following full integration. Prior to the acquisition of OneLink, we will contribute our 100% interest in LCPR, and Searchlight will contribute cash to a newly formed entity. This new entity will in turn acquire OneLink for cash consideration. Upon completion of the transaction, the combined business will be 60%-owned by Liberty Global and 40%-owned by Searchlight.
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