US fixed operator Frontier Communications has agreed to sell its business in the northwest of the US for USD 1.352 billion to WaveDivision Capital, a company run by the founder of Wave Broadband, and Searchlight Capital Partners. The sale will provide Frontier with much-needed cash to reduce its debt.
The assets in the four states include a fixed network covering around 1.7 million premises, including 500,000 with FTTP. At the end of March, Frontier served around 150,000 fibre broadband, 150,000 copper broadband and 35,000 TV customers in these states, and the activities generated USD 619 million in revenue and USD 272 million in adjusted EBITDA for the year to March.
The transaction is subject to regulatory approvals and other customary closing conditions, with closing anticipated to occur within one year.
WDC is headed by Steve Weed, founder and former CEO of Wave Broadband. The latter is active in Washington, Oregon and California offering a combination of cable and fibre services. Weed did not say if he would seek a merger of the Frontier assets with Wave Broadband but noted "I’m excited to be able to continue to serve my community through this new venture."
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. Frontier has also agreed to provide certain transition services to the new owners following the closing.
Frontier said it was pleased to find a buyer with experience in the sector and building out fibre networks. Searchlight already has multiple holdings in the telecom market, such as Liberty Latin America, Italy's Eolo, Mitel and Uniti.
