Deals of the YEar awards
In August 2022, New York-based Stonepeak Infrastructure Partners closed the purchase of $2.7 billion worth of assets previously owned by Lumen Technologies in Latin America, giving the company a strong presence in the fiber business in the region.
The assets include extensive subsea and terrestrial fiber networks, complemented by a data centre portfolio, that serve telecom customers in 20 Latin American markets.
“Lumen has an extensive footprint across the region, with a high-quality fiber network, an interconnected portfolio of data centers and a blue chip customer base,” says Andrew Thomas, managing director at Stonepeak, which wins the award for Private Equity Deal of the Year for the transaction. “We look at businesses that provide critical infrastructure, possessing high barriers to entry and also strong prospects for growth.”
The negotiations with Lumen, with whom Stonepeak already did business, lasted a couple of years, and the two companies reached an agreement for the transfer of the assets in July 2021. Extra effort, and over a year of negotiation, was required to obtain regulatory approval in all the jurisdictions involved, including the US.
But Thomas says that the delay had no impact on the funding of the deal, which was arranged before the market took a turn for the worse in early 2022.
“We had a fully committed financing package from a group of large international banks, and we bought the business with a mix of syndicated debt and equity,” he notes.
The business has been rebranded as Cirion, and Thomas sees positive prospects for it despite the global economic downturn. Among the strengths of the business, he highlights that the majority of its revenue is derived from large multinational carriers and is paid in US dollars.
Thomas also believes that demand for digital infrastructure services will remain strong in the region, and Stonepeak has retained the management team that helped Lumen put together an important portfolio of Latin American assets over the past couple of decades.
“We have accelerated organic capital projects for the business, expanding data center capacity, for example,” says Thomas. “These initiatives are all consistent with the company’s ongoing strategy. We are also confident in the ability of the management team to drive growth in the business as they have done over the past 10 to 15 years.” LF
Financial Advisors: J.P. Morgan; Lazard; BofA Securities; Citi; Goldman Sachs; Morgan Stanley
Legal Advisors: Jones Walker; Mattos Filho; Simpson Thacher; Tozzini Freire
All supporting financial institutions and law firms were transmitted to LatinFinance by the award category winners. For updates please email email@example.com