Frontier Communications Northwest operations sale pending
The 350,000 Northwest customers of Frontier Communications Co. can look forward to next generation internet service as the company moves to sell its regional operations.
Norwalk, Conn.-based Frontier announced Wednesday it is selling its operations in Washington, Oregon, Idaho and Montana to WaveDivision Capital of Kirkland, in partnership with Searchlight Capital Partners of New York.
The $1.35 billion deal is expected to close by the end of the year.
WDC and Searchlight will form a unnamed company to operate the system.
WDC is led by Steve Weed, founder and former CEO of Wave Broadband, which sold last year for $2.4 billion.
In a statement Wednesday, Weed affirmed plans to develop a fiber network to serve the new territory. Frontier customers in the Tri-Cities rely on the slower DSL.
“Our plan is to invest further in our markets, specifically by extending fiber to more homes and businesses, to bring them the high speeds they want,” he said. Weed said details will be announced after the deal closes.
FCC must approve deal
Frontier said its Northwest operations accounted for $619 million in revenue and $46 million of net revenue in the year that ended on March 31. Selling the regional operation will reduce its debt and improve its balance sheet.
“We are pleased to have a buyer with extensive experience building and operating advanced fiber-based communications assets in these regions,” it said in a statement from Dan McCarthy, president and CEO.
Under terms of the deal, Frontier (NASDAQ: FTR) will receive $1.35 billion in cash at closing, less adjustments related to pension and retiree medical liabilities and other costs.
The deal is subject to approval by the Federal Communications Commission, the U.S. Department of Justice, the Committee on Foreign investment in the United States, as well as state regulatory agencies and some local video franchise authorities.
A spokesman said the approval process is just getting started and will take several months.
Searchlight invests in both equity and debt. Its holdings include broadband and tech infrastructure firms, frozen food manufacturers and a British rubber boot maker.