Meet Vrio’s Big, Bold IPO

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Vrio has filed an amended S-1 form with the U.S. Securities and Exchange Commission (SEC) regarding its initial public offering. The firm expects to price its 29.68 million shares in the range of $19 to $22 a piece, with an overallotment option for an additional 4.45 million shares. At the maximum price, the entire offering is valued up to $751.01 million. The company intends to list its shares on the New York Stock Exchange under the symbol VRIO.

The underwriters for the offering are Goldman Sachs, JPMorgan, Citigroup, Morgan Stanley, Merrill Lynch, Barclays, BTG Pactual, Credit Suisse, Deutsche Bank, ITAU BBA, Santander, Banco do Brasil, BNP Paribas, Bradesco BBI, Academy Securities, Blaylok Van, Cabrera Capital Markets, C.I. King, CastleOak Securities, Drexel Hamilton, Loop Capital Markets, Mischler Financial Group, Ramirez, Siebert Cisneros Shank and the Williams Capital Group.

It’s worth pointing out that AT&T Inc. (NYSE: T) is spinning off Vrio, and after the offering closes AT&T will be the majority shareholder in Vrio.

As for Vrio, it is a leading provider of digital entertainment services in South America, with about 13.6 million subscribers in the region as of December 31, 2017. That region consists of eight countries in South America and three in the Caribbean. Vrio is one of the two largest pay-TV providers in each country in which it operates, with the exception of Chile and Peru.

The firm began operations in 1996 and since then has expanded by executing its strategy to provide the best digital entertainment experience anytime, anywhere in the region. Its offerings and brands are widely recognized as market leading. Through scale and purpose-built technology, Vrio offers customers a full range of international, regional and local content, including exclusive programming, tailored to each of the countries and certain submarkets in the region and delivered in a wide range of packages and features so that customers can receive services in a manner best suited to their needs.

In the filing, Vrio described its finances as follows:

For the year ended December 31, 2017, our revenues were $5,568 million, as compared to revenues of $5,023 million for the year ended December 31, 2016. In addition, our net income was $222 million for the year ended December 31, 2017 as compared to a net loss of $356 million for the year ended December 31, 2016, and our Adjusted EBITDA was $1,245 million for the year ended December 31, 2017 as compared to $1,035 million for the year ended December 31, 2016.

The firm intends to use the net proceeds from this offering to repay a portion of the related-party indebtedness issued to AT&T.