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May 29, 2019

Frontier unloads Northwest telecom assets for $1.35B

frontier PHOTO | Matt Pilon Frontier's Trumbull Street facility in downtown Hartford.
By Matt Pilon

Norwalk-based Frontier Communications, which provides telephone service across Connecticut and internet and video service in portions of the state, is reducing its national footprint.

On Wednesday, the company said it has agreed to sell its operations in Washington, Oregon, Idaho and Nevada for $1.35 billion in cash, subject to closing adjustments.

The buyer is Washington-based WaveDivision Capital LLC, in partnership with Searchlight Capital Partners LLC.

“We are pleased to have a buyer with extensive experience building and operating advanced fiber-based communications assets in these regions,” Frontier President and CEO Dan McCarthy said in a statement.

McCarthy said the sale, which comes amid a turbulent time for wireline communications companies as more subscribers cut the cord in favor of wireless and other alternative services, would reduce Frontier’s debt load and increase its liquidity. Frontier had $17.4 billion in outstanding debt as of Dec. 31, 2018.

Assets in the pending deal include approximately 350,000 residential and commercial customers who produced $619 million in revenue and a $46 million profit for Frontier over the past year. Frontier reported a total revenue of $8.61 billion in 2018.

Frontier announced the deal just ahead of Thursday’s opening bell, and its stock was trading at $1.93 per share as of late morning, up from its Wednesday closing price of $1.73.

In 2014, Frontier acquired AT&T’s wireline operations and triple-play offering in Connecticut for $2 billion.

It followed that up in 2016 with a much larger deal -- the acquisition of Verizon wireline properties in California, Texas and Florida for $10.5 billion.

As of the end of 2018, the company reported 4.5 million customers, 3.7 million broadband subscribers and 21,200 employees across 29 states.

 

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