Mastec, the telecommunications company of Cuban American leader Jorge Mas Canosa, bought Sintel, the engineering and installation unit of Spain’s Telefonica de Espana SA, for $39.5 million.
A statement from Telefonica said the signing took place at its headquarters in Madrid. The purchase price was in line with Sintel’s book value of 4.935 billion pesetas.
Mastec, a Miami-based installer of fiber optics systems for telephone and cable television, acquired 100 percent of Sintel, which does installation and engineering work for Telefonica, Spain’s national telephone company.
The move to acquire the money-losing construction subsidiary of Spain’s largest telephone company pay is expected to more than double Mastec’s sales to $480 million next year.
Telefonica de Espana, S.A. agreed to sell Sistems y Instalaciones de Telecomunicacion, or Sintel, to Mastec along with a three-year construction services contract that will boost Mastec’s sales by $604 million by 1999.
The transaction has been approved by both companies’ boards of directors and should be completed by April 30.
The deal will increase Mastec’s presence in the rapidly growing Spanish cable television industry and in Argentina, Chile, Peru and Venezuela.
Sintel lost $14 million on sales of $390 million last year after taking a $27.8 million restructuring charge for personnel reductions and cost-cutting moves. Mastec’s stock was up 62 cents to close at $11.74.
Jorge Mas Canosa, 56, leader of the National Cuban American Foundation, one of the most active Cuban exile groups in the United States, is chairman of the company.
In an interview published over the weekend with the daily newspaper El Pais, Mas Canosa said he was making the investment “out of love for Spain.” Mastec’s president is Mas Canosa’s son, Jorge Mas. In 1995, Mastec reported net profit of $7.5 million, up from $6.8 million the year before.
Business Writer Charles Lunan contributed to this report, which was supplemented with information from Bloomberg Business News.
