Telefonica to Sell Call-Center Unit to Bain in EU1B Deal

Telefonica SA (TEF), the Spanish phone company accelerating asset sales to help cut more than 58 billion euros ($75 billion) of net debt, agreed to sell its Atento call-center division to Bain Capital Partners LLC.

The transaction gives Atento an enterprise value, which includes debt, of 1.04 billion euros, Madrid-based Telefonica said in a statement today. Atento had 175 million euros of net debt at the end of June.

Chief Executive Officer Cesar Alierta is selling assets, including shares in Telefonica’s German and Latin American businesses, as he seeks to avert a potential debt-rating cut. Telefonica had tried to sell Atento as early as in 2007, and a year ago shelved plans for an initial public offering of the unit, which employs more than 152,000 employees, almost half of the company’s total.

“The deal has been done at a better price than the market expected,” Nuno Matias, an analyst at Espirito Santo in Lisbon, said by phone. “The company really needs to carry out further transactions such as the IPO in Germany in order to deleverage.”

Bain Capital, the private-equity firm co-founded by U.S. presidential candidate Mitt Romney, has backed companies including business-software provider MYOB Ltd. and cinema chain AMC Entertainment Inc.

Deferred Payment

The Atento deal value includes 110 million euros of a deferred payment as well as vendor financing provided by Telefonica to help Bain pay for the asset valued at 110 million euros, the Spanish company said.

Telefonica shares gained 0.3 percent to 10.24 euros at 9:49 a.m. in Madrid trading, valuing the company at 46.6 billion euros.

Atento had 1.8 billion euros in revenue last year. That’s less than 3 percent of the 62.8 billion-euro sales reported by the parent company. Atento’s 2011 operating income before depreciation and amortization dropped 15 percent to 161 million euros.

The transaction, subject to regulatory approval, is expected to be completed by the end of the year, Telefonica said. The deal also includes a nine-year agreement for Atento to continue providing services to Telefonica.

To contact the reporter on this story: Manuel Baigorri in Madrid at mbaigorri@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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