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Lumen (LUMN) to Sell Latin American Business for $2.7 Billion

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Lumen Technologies, Inc. (LUMN - Free Report) has inked a deal to sell its Latin American business to Stonepeak for $2.7 billion.

Lumen’s share price increased 2.3% on Jul 26 in response to the news, closing the session at $12.92.

Headquartered in New York, Stonepeak is a leading alternative investment firm that specializes in infrastructure with almost $37 billion of assets under management.

Based in Monroe, LA, Lumen is a facilities-based technology and communications company. With nearly 450,000 route fiber miles and customers in more than 60 countries, it provides various integrated services and solutions.

Per the deal, Lumen will divest its Latin American business, which will operate as an independent, U.S.-headquartered portfolio company of Stonepeak, to be named the “New LATAM Company”. Lumen will continue to serve customers in North America and the EMEA and APAC regions.

The present Latin American leadership team and organization will remain in place, headed by Hector Alonso, Lumen’s president for the region. Lumen will have a strategic partnership with the New LATAM Company, serving joint customers in the region.

The transaction is expected to unlock value for Lumen’s shareholders and allow it to maintain its global presence. It will enable Lumen to accelerate investments in key growth areas and provide flexibility on capital allocation strategy for debt reduction and evaluation of share repurchases.

AustralianSuper, Australia’s largest pension fund, is investing along with Stonepeak in this transaction. The deal, subject to regulatory approvals, is expected to be closed in the first half of 2022.

Lumen’s shares have returned 30.6% in the past year against the industry’s decline of 25.4%.

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The stock currently has a Zacks Rank #4 (Sell).

Some better-ranked stocks in the industry are 360 DigiTech, Inc. (QFIN - Free Report) , Blucora, Inc. (BCOR - Free Report) and Seagate Technology Holdings plc (STX - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

360 DigiTech delivered a trailing four-quarter earnings surprise of 42.2%, on average.

Blucora pulled off a trailing four-quarter earnings surprise of 3.8%, on average.

Seagate delivered a trailing four-quarter earnings surprise of 11.4%, on average.