DigitalBridge Group has acquired 100% of Mundo (formerly Mundo Pacífico), a fiber-to-the-home (FTTH) broadband provider to households and businesses in Chile, from private equity firm Linzor Capital Partners, and minority investors Teras Capital and CyC. Specifically, Mundo was held through the Linzor Capital Partners III (LCP III) fund.

While DigitalBridge has experience investing in Chile through its portfolio company Andean Telecom Partners (ATP), the firm’s investment in Mundo marks the addition of a pure play fiber-to-the-home (FTTH) investment in Latin America to its digital infrastructure portfolio.

Mundo – DigitalBridge Buys from Linzor in Chile

Mundo provides high-speed internet, pay TV, and telephony services to households and businesses in Chile through fiber-to-the-home (FTTH) connections. Presently, Mundo owns one of the largest FTTH networks in Chile, reaching over 3 million homes passed. Through this network, the company serves more than 650k customers, implying a ~22% penetration rate.

Subsequently, by the end of 2022, Mundo expects to reach 4 million homes passed in Chile with its FTTH network. Indeed, this implies a build pacing of 1 million fiber passings per year.

Open Access Wholesale Fiber Network

Mundo is shifting towards a neutral host model by positioning itself as an open access wholesale fiber network. Therefore, Mundo’s network is open to all internet service providers (ISPs) and carriers to offer broadband services to end users.

Management

Post-transaction, Mundo’s management team, which is led by Enrique Coulembier as CEO, will remain in-place at the company.

History

In September 2019, Linzor Capital Partners acquired Pacifico Cable, which offered services under the brand Mundo Pacífico. Since then, the company has managed to triple the size of its customer base and network.

As a reference point, Mundo had 6.8k+ miles (11.0k+ kilometers) of fiber network installed at the time of Linzor’s acquisition. As such, this implies that Mundo’s network currently spans ~20.5k miles (~33k kilometers).

Under Linzor’s ownership, Mundo brought high-speed fiber optic internet at competitive prices to many underserved locations in Chile, where there previously was no connectivity.

Chile Fixed Broadband Market – Overview

Per SUBTEL, Chile’s telecommunications regulator, Chile had a total of 4.2 million fixed broadband connections, as of September 30, 2021. Of this total, 2.2 million fixed broadband connections, equivalent to 52.9%, utilized fiber optic technology.

Competitors

In Chile, SUBTEL ranks the country’s largest fixed broadband providers as VTR (Liberty Latin America) with a 29.8% market share, Movistar (Telefónica) with a 28.8% market share, and Mundo with a 13.5% market share. Notably, Mundo holds a greater market share than Claro (América Móvil) in Chile, who is the fourth largest fixed broadband provider in the country.

Finally, Telefónica’s share of the fixed broadband market in Chile is held in-partnership with private equity firm KKR, under the brand ON*NET Fibra. As of year-end 2021, ON*NET Fibra passed 3 million homes with fiber, with a target of reaching 3.5 million homes passed in Chile by year-end 2022.

Linzor Capital Partners – Overview

Linzor Capital Partners, a private equity firm, has a presence in Chile, Colombia, Mexico, Peru, and Uruguay. Overall, the firm has $1.2bn+ in capital commitments and investments in sectors including financial services, education, healthcare, retail, and technology.

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