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May 29, 2019
NORWALK, Conn. -- Frontier Communications Corporation today announced it has entered into a definitive agreement to sell its operations and all associated assets in Washington, Oregon, Idaho, and Montana to WaveDivision Capital, LLC (WDC) in partnership with Searchlight Capital Partners, LLC (Searchlight) for $1.352 billion in cash subject to certain closing adjustments.
Frontier’s operations in these states serve more than 350,000 residential and commercial customers as of March 31, 2019 and account for $619 million of revenue, $46 million of net income and $272 million of Adjusted EBITDA for the twelve months ending March 31, 2019. The transaction is subject to regulatory approvals and other customary closing conditions, with closing anticipated to occur within one year.
WDC, headed by broadband entrepreneur Steve Weed, is based in Kirkland, Washington, and brings extensive technical, organizational, and management experience in building and operating residential and business next-generation fiber networks.
“We are excited to be partnering with Searchlight on this opportunity to acquire Frontier’s operations in the Northwest,” said Steve Weed, CEO of WDC, and Founder and former CEO of Wave Broadband. “We have a proven track record of customer satisfaction by providing fast, reliable internet connectivity combined with great service and support. Having grown up in the Northwest, I’m excited to be able to continue to serve my community through this new venture.”
“Searchlight is pleased to have reached this agreement with Frontier,” said Eric Zinterhofer, Founding Partner of Searchlight. “We are excited to partner with Steve and his team, who have an outstanding track record of building best-in-class fiber networks, and who will enable us to accelerate the deployment of superior next generation products for our residential and business customers.”
Additional Transaction Details
Frontier will continue to operate the business and serve customers with existing products and services until the transaction closes. WDC and Searchlight have formed a new company to operate the business and honor existing customer commitments and contracts after the transaction closes.
Under the terms of the transaction, Frontier will receive $1.352 billion in cash at closing subject to certain adjustments, including working capital as compared to an agreed target, and certain pension and retiree medical liabilities. Frontier has also agreed to provide certain transition services to the new ownership group following the closing.
The transaction is subject to regulatory approvals by the Federal Communications Commission, the U.S. Department of Justice, the Committee on Foreign Investment in the United States (CFIUS), applicable state regulatory agencies, and certain local video franchise authorities.
Frontier Communications Corp. (NYSE: FTR)
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