DENVER and NEW YORK, July 26,
2021 /PRNewswire/ -- Lumen
Technologies (NYSE: LUMN) and Stonepeak today announced
the signing of a definitive agreement for Lumen to sell its Latin
American business to Stonepeak, a leading alternative investment
firm, for $2.7 billion.
Under the terms of the purchase agreement, Lumen will divest its
Latin American business, which will operate as an independent, U.S.
headquartered portfolio company of Stonepeak (the "New LATAM
Company"). The current Latin American leadership team and
organization will remain in place, led by Hector Alonso, Lumen's president for the region.
Lumen will also retain a strategic relationship with the New LATAM
Company and continue to serve joint customers in the region.
"This transaction unlocks value for our shareholders while
allowing us to maintain our global presence through our strategic
relationship with the New LATAM Company," said Lumen President and
CEO Jeff Storey. "This transaction
allows Lumen to focus investments in key areas of the business to
drive future growth while providing flexibility for our capital
allocation strategy."
The transaction will accomplish the following for Lumen:
- Monetizes an attractive asset at ~9X the Latin American
business' 2020 Estimated Adjusted EBITDA
- Provides additional capital to enable Lumen to accelerate
investments in key growth areas
- Enables greater flexibility on capital allocation, allowing for
debt reduction and the continued evaluation of share
repurchases
"Lumen's Latin American business is a market leader with a
strong footprint and exciting potential for expansion," said
Brian McMullen, Stonepeak Senior
Managing Director. "Stonepeak has been an early and active investor
in digital infrastructure globally and we are looking forward to
applying our experience and additional capital to Lumen's Latin
American business."
A new regional partnership
Lumen will continue to serve customers in North America and the EMEA (Europe, Middle
East and Africa) and APAC
(Asia Pacific) regions with needs
in Latin America through its
strategic partnership with the New LATAM Company. This relationship
includes reciprocal reselling and network arrangements that
leverage each other's extensive fiber footprints, data centers and
other network assets. Upon the completion of the transaction,
customers who seek services within the Latin America region will work directly with
the New LATAM Company or through the strategic Lumen
partnership.
"Stonepeak has made it very clear that they are committed to
enterprises that operate in Latin
America. This transaction provides the New LATAM Company
with more autonomy to serve its customers and the enhanced ability
to react to and invest in changing market conditions in the
Latin America region," said
Alonso. "These customers will experience the same world-class
network and services they have come to expect from a leadership
team focused on their success."
For Stonepeak, the transaction represents an opportunity to
invest in a Latin American communications platform with an
extensive subsea, terrestrial fiber and data center footprint
across the region, including several of its large metro markets. As
with its other communications platforms, Stonepeak plans to invest
heavily behind Alonso and the New LATAM Company management
team.
"We look forward to partnering with Hector and his team to
expand the network across the entire region and position the
platform for continued long-term growth," said Andrew Thomas, Stonepeak Managing Director.
Lumen and Stonepeak expect the transaction to close in the first
half of 2022, upon receipt of all regulatory approvals in the U.S.
and certain countries where the New LATAM Company operates, as well
as the satisfaction of other customary conditions.
AustralianSuper, Australia's
largest pension fund, is investing alongside Stonepeak in the
transaction.
The purchase agreement contains various customary covenants for
transactions of this type, including various indemnities and
purchase price adjustments. BofA Securities, Morgan Stanley &
Co. LLC, Citi, and Goldman Sachs are acting as financial advisors
to Lumen in connection with the transaction.
Jones Walker LLP is serving as legal advisor.
About Lumen
Lumen is guided by our belief that humanity is at its best when
technology advances the way we live and work. With approximately
450,000 route fiber miles and serving customers in more than 60
countries, we deliver the fastest, most secure platform for
applications and data to help businesses, government and
communities deliver amazing experiences.
Learn more about the Lumen network, edge cloud, security,
communication and collaboration solutions and our purpose to
further human progress through technology at news.lumen.com/home,
LinkedIn: /lumentechnologies, Twitter: @lumentechco, Facebook:
/lumentechnologies, Instagram: @lumentechnologies and YouTube:
/lumentechnologies. Lumen and Lumen Technologies are registered
trademarks in the United
States.
About Stonepeak
Stonepeak is a leading alternative investment firm specializing
in infrastructure and real assets with approximately $37 billion of assets under management. Through
its investment in defensive, hard-asset businesses globally,
Stonepeak aims to create value for its investors and portfolio
companies, and to have a positive impact on the communities in
which it operates. Stonepeak sponsors investment vehicles focused
on private equity and credit. The firm provides capital,
operational support, and committed partnership to sustainably grow
investments in its target sectors, which include transport and
logistics, communications, water, energy transition, and power and
renewable energy. Stonepeak is headquartered in New York with offices in Houston, Austin and Hong
Kong. For more information, please visit
https://stonepeakpartners.com/.
About AustralianSuper
AustralianSuper manages more than AUD$225 billion of members'
retirement savings on behalf of more than 2.4 million members from
around 350,000 businesses. One in 10 working Australians is a
member of AustralianSuper, the nation's largest pension fund.
Forward Looking Statements
Except for the historical and factual information contained
herein, the matters set forth in this press release, including
statements regarding the expected transaction proceeds, timing and
benefits of the proposed transactions, and other statements
identified by words such as "estimates," "expects," "projects,"
"plans," "intends," "will" and similar expressions, are
forward-looking statements within the meaning of the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are subject to a number of risks,
uncertainties and assumptions, many of which are beyond our
control. Actual events and results may differ materially from those
anticipated, estimated or projected if one or more of these risks
or uncertainties materialize, or if underlying assumptions prove
incorrect.
Factors that could affect actual results include but are not
limited to: the ability of the parties to timely and successfully
receive the required approvals of regulatory agencies; the
possibility that the purchaser will not be able to finance the
divestiture on the terms contemplated or at all; the possibility
that the anticipated benefits from the proposed transactions cannot
be fully realized in the manner contemplated; the possibility that
it may be more difficult than anticipated to segregate the
Company's Latin American business from its other businesses in
connection with the divestiture; the possibility that the Company
might be required to pay higher than anticipated tax payments, to
make unanticipated payments under the transaction agreements or to
otherwise receive less net cash proceeds than anticipated; changes
in the Company's cash requirements, financial position or business,
operational or financial plans; the effects of competition from a
wide variety of competitive providers; the purchaser's ability to
successfully maintain the quality and profitability of its product
and service offerings and to introduce new offerings on a timely
and cost-effective basis; and other risk factors and cautionary
statements as detailed from time to time in the Company's reports
filed with the U.S. Securities and Exchange Commission. There can
be no assurance that the Company's proposed divestiture of its
Latin American business will in fact be consummated in the manner
described or at all. You should be aware that new factors may
emerge from time-to-time and it is not possible for us to identify
all such factors nor can we predict the impact of each such factor
on the proposed transactions. You should not place undue reliance
on these forward-looking statements, which speak only as of the
date of this press release. Unless legally required, the Company
undertakes no obligation and expressly disclaims any such
obligation to update publicly any forward-looking statements,
whether as a result of new information, future events or
otherwise.
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SOURCE Lumen Technologies