Denis O'Brien's mobile phone company, Digicel, has sold 202 communication towers in El Salvador to Florida-based Phoenix Tower International in a multimillion dollar deal.
The terms of the transaction were not disclosed but other deals in the region have been valued at between $85,000 and $300,000 per tower. This would suggest a valuation range of between $17 million and $60 million for Digicel.
Commenting on the deal, Digicel group chief executive Colm Delves said: "We look forward to partnering with PTI in El Salvador. This transaction allows us to monetise non-core assets and reinvest in our business to drive our competitive edge as we build our business for the future."
Digicel is the number four player in El Salvador, having previously tried to sell the business to Carlos Slim's America Movil. That transaction was blocked by regulators.
Latest public filings for the business show it had one million customers in the central American country at the end of June 2015. This was down from 1.2 million at the end of March 2014.
Aggressive competition
Revenues for the three months to the end of June 2015 dropped by 20 per cent to $22.8 million due to a reduction in mobile termination rates and “aggressive” competition.
PTI said it was “excited” to partner Digicel on the deal.
“El Salvador, with its active four carrier market, represents a logical expansion of PTI’s operations across Central America,” said Dagan Kasavana, the company’s chief executive. “Through this transaction we have worked closely with the principals at Digicel and look forward to a long-term relationship where we can continue to help them grow their great business.”
Scotiabank arranged financing for the transaction and acted as Phoenix’s sole financial adviser for the deal. Choate Hall & Stewart and Nassar Abogados acted as legal advisors to PTI while Orrick acted as legal advisor to Digicel.
