Partnership, Merger & Acquisition

According to a Wall Street Journal report, fiber network operator Zayo is in talks to acquire both Windstream and Uniti. No deal is imminent, and according to the report, negotiations have stalled over the price for Uniti.

Uniti is a real estate investment trust (REIT), formed primarily through the shedding of Windstream network assets in a complex deal several years ago. Ironically, that deal led to Windstream filing for bankruptcy to protect itself from lien holders who said the Uniti deal violated covenants for corporate bonds.

Uniti has since expanded beyond its Windstream network asset roots and has acquired many other network assets and has an extensive fiber network operation of its own. Still, roughly 70% of its revenue is tied to Windstream.

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Since emerging from bankruptcy last year, Windstream has set out on a $2 billion network expansion project to add fiber infrastructure across its 18-state footprint. Windstream has interest in residential and SMB access, enterprise, and wholesale business segments.

Uniti Network Map (Source: Uniti)

Windstream has over 1 million broadband subsribers, adding 60K and reaching 589K additional locations in 2020. As a private company, Windstream no longer offers detailed subscriber data.

Should a Zayo Uniti Windstream deal come together, it would create a new fiber network powerhouse in North America, with network assets in Europe as well. Zayo would now also own substantial residential and SMB customers, thanks to Windstream’s assets.

Windstream network map
Windstream Network Map (Source: Windstream)

The Wall Street Journal report points out that a combined Windstream and Uniti under Zayo would free up the $700 million Windstream reportedly pays Uniti annually for access to network capacity. Those funds could be potentially reapplied towards growing the combined network even further.

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