Two telecommunications companies announced closures of small ILEC divestitures on the last day of July. Though they were announced on the same day, it seems more likely that they are related to the specifics faced by the parties and are not harbingers of fundamental changes that would make them leading indicators of a wave of mergers and acquisitions.
One deal featured Consolidated Communications Holdings. It announced that it has sold two of its companies in Virginia – Peoples Mutual Telephone Company and Peoples Mutual Long Distance Company – to RiverStreet Management Services, which does business as RiverStreet Networks and is a subsidiary of North Carolina based Wilkes Communications.
The sale by Consolidated was announced last November. Peoples serves the Virginia communities of Gretna, Hurt, Renan and Sandy Level. It was one of several rural telcos owned by MJD Ventures, a subsidiary of FairPoint. Consolidated acquired FairPoint in early July 2017.
Small ILEC Divestitures
The second announcement was Zayo Group Holdings completion of the sale of the Scott-Rice Telephone Company to Nuvera (formerly New Ulm Telecom) for $42 million. Scott-Rice Telephone is a Minnesota ILEC that serves the counties after which it is named. Zayo initially acquired Scott-Rice in its purchase in March 2017 of Electric Lightwave. Since the acquisition, the unit has been managed within Zayo’s Allstream business segment.
“The completion of this sale is an important step toward the separation of the Allstream assets,” Zayo CFO Matt Steinfort said in a press release. “It better positions us to focus and execute on our core communications infrastructure business.”
Zayo’s acquisition of Electric Lightwave was mostly about fiber assets, and the inclusion of Scott-Rice Telephone was not headlined at the time. In the deal, Zayo gained a facilities-based regional fiber network provider with a presence in key West Coast markets including San Francisco, Portland, Seattle, and Sacramento, among others.
