11 Nov Everstream strikes $135M fiber asset deal with Uniti
Everstream is adding both metro and long-haul fiber assets to its portfolio thanks to a $135 million deal with Uniti.Everstream and Uniti announced a definitive agreement on Tuesday that extended Everstream’s reach into Pennsylvania while also acquiring existing Uniti customers. The deal allows Everstream to add more than 5,600 route miles to its network, which increased its size by more than 35%
Uniti’s Pittsburgh and Philadelphia markets, which include dense fiber deployments, were part of the transaction, and will be connected to Everstream’s fibers networks in other cities across the Midwest, including Chicago.
FREE DAILY NEWSLETTER
Like this story? Subscribe to FierceTelecom!
The Telecom industry is an ever-changing world where big ideas come along daily. Our subscribers rely on FierceTelecom as their must-read source for the latest news, analysis and data on the intersection of telecom and media. Sign up today to get telecom news and updates delivered to your inbox and read on the go.
Uniti provided details on the transaction in Tuesday’s third quarter results. As part of the deal, Uniti will enter into two 20 year indefeasible right of use (IRU) lease agreements with Everstream on Uniti owned fiber that spans eight states and covers over 10,000 route miles and 220,000 fiber-strand miles.
Uniti agreed to sell to Everstream a portion of Uniti Fiber’s Northeast operations and certain dark fiber IRU contracts that it acquired as part of its settlement with Windstream earlier this year. Those assets, on a combined basis, currently generate approximately $24 million of annual revenue.
In addition to the upfront payments, Uniti will receive fees of approximately $3 million annually from Everstream over the initial 20-year term of the IRU lease agreements, subject to an annual escalator of 2%. The deal is slated to close in the second quarter of next year once it passes the customary closing conditions and regulatory hurdles.
AMP Capital, a global investment manager headquartered in Australia, bought Everstream in 2018. AMP funded the deal with Uniti.
RELATED: Everstream plans $250M fiber investment for Midwest buildout
In January, Everstream announced it would invest $250 million to expand its fiber infrastructure across the U.S. In Tuesday’s press release, Everstream said that investment stood at $300 million. Since the third quarter of last year Everstream has opened five offices, completed two acquisitions and onboarded more than 130 employees.
In April, Everstream announced it had secured $342.5 million in debt financing from nine banks. Cleveland-based Everstream is using the financing to accelerate its 2020 growth strategy, which includes expanding to five new markets while adding more fiber in the existing markets it serves.
The five new Midwest markets include: Chicago, which launched in February; St. Louis, Missouri; Dayton, Ohio; Fort Wayne, Indiana; and Louisville, Kentucky.
Sorry, the comment form is closed at this time.