America Movil has signed an agreement with BCP?s creditor banks buying the A-band cellular carrier for metropolitan Sao Paulo by 625m USD, including debts. It means 367 USD per subscriber. BCP has 1.7m subscribers at this point.
America Movil will be able to rapidly and efficiently obtain synergies for its Brazilian operations by acquiring BCP. Claro currently controls ATL, Tess, Americel, Telet and BSE, with 6.7m subscribers all told. Moreover, its technology is TDMA, the same as BCP, albeit migrating to GSM.
A director of one of BCP?s creditor banks with a key role in the restructuring of its debt says the price paid could exceed 500 USD per subscriber, or 850m USD, but stresses that ?Verbier (Safra Group) and BellSouth would have to repay part of the debt?.
America Movil doesn?t make a habit of spending large amounts on wireless acquisitions. For example, it paid 180m USD for BCP Nordeste?s 1m subscribers, i.e. less than 200 USD per subscriber. In its latest deal, acquisition of Argentina?s CTI, with 1.2m subscribers and 1.1bn USD in debt, it paid about 250 USD per subscriber. In that case, debt restructuring involved a write-off of around 75%. A discount that size in the case of BCP would bring its value down to 425m USD, for the same 250 USD per subscriber.