TDS and US Signal have reached an agreement for TDS to sell its OneNeck data centers to US Signal. Terms of the agreement were not divulged.
The news comes just days after TDS announced plans to sell its UScellular business to T-Mobile. The goal of both divestitures is the same: to sell off non-strategic assets to raise capital to support TDS fiber expansion.
TDS provides broadband, video and voice service in Tier 2 and 3 markets in multiple states. US Signal is a competitive carrier that offers connectivity and data center services in Wisconsin, Iowa, Illinois, Indiana, Kentucky, Ohio, Michigan and Pennsylvania.
OneNeck specializes in multi-cloud offerings, managed services, professional IT services, hardware and local connectivity. Its six data centers are in Arizona, Colorado, Iowa, Minnesota, Nebraska, Oregon and Wisconsin. It is a portfolio company of Igneo Infrastructure Partners.
For US Signal, the acquisition provides an opportunity to increase its data centers from nine to 15 and quadruple square footage. It also will extend the company’s footprint to the west, although it’s worth noting that a press release indicates that only the Minnesota, Iowa and Wisconsin data centers will be connected to US Signal’s fiber network.
“OneNeck is a product innovator with deep knowledge of numerous industries,” said US Signal CEO Daniel Watts in a prepared statement. “Together, we will provide our customers with greater scale and technical capabilities.”
In a separate prepared statement, TDS Executive Vice President and CFO Vicki Villacrez said “As part of our capital allocation process, we are prioritizing assets to determine what is strategic and can improve our competitiveness. The sale of OneNeck provides additional capital that can be used to support TDS Telecom’s fiber program, which includes investing in communities throughout the US with quality broadband connectivity.”
TDS’s decision to focus on fiber deployments would appear to be a smart one, considering that areas lacking fiber are experiencing a “land grab” as providers seek to be the first with fiber in a market.
The capital raised also will be used for “general corporate purposes,” according to TDS.
TDS acquired OneNeck in 2011.
Igneo’s acquisition of US Signal was announced in 2022.
