Transaction affirms Lumen’s investment strategy designed to drive future growth
Lumen Technologies and Stonepeak 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.
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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 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.”
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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.”
