It’s official – the Frontier-Verizon transaction has closed and Frontier has absorbed over 4.8 million Verizon access lines and over 1 million broadband customers from rural markets in 14 states. The total value of the transaction is $8.6 billion.
It’s a somewhat complicated transaction. A new company, New Communications Holdings Inc. was formed and spun out of Verizon. It then immediately merged with Frontier. Verizon stockholders are receiving $5.247 billion in Frontier common stock (based on the valuation formula contained in the merger agreement with Frontier), and Verizon has received $3.333 billion in value, primarily through a $3.083 billion special cash distribution.
The new Frontier will provide voice, broadband, wireless Internet data access, satellite video, FiOS and other services to more than 4 million residential and business customers in 27 states. Frontier says, “this transaction positions Frontier as the largest pure rural telecommunications carrier in the United States.”
Frontier has been busy preparing for this transaction and certainly looks to avoid the crisis created by a similar transaction between FairPoint and Verizon. For example, ‘command centers’ have been formed in many locations, including in Charleston, West Virginia, where Frontier will absorb over 600K access lines.
“This is my third system cutover of similar scale and scope, and I’m confident this will be the best we’ve done,” Ken Arndt, vice president of Frontier’s Southeast region tells the Charleston Gazette. “We don’t expect any issues or problems. We believe we have all the Is dotted and Ts crossed.” Maybe a little over confidence? With a transaction of this size and the enormity of the operational cut over process, expecting no issues or problems seems a little unrealistic.
Frontier also launched a new website to help former Verizon customers understand the transition. Additionally, Frontier launched a new corporate website today, which after a quick perusal, looks to have vastly improved over its old site.