Despite the COVID-19 pandemic, the past year was another big one for broadband and telecom provider mergers and acquisitions. Here’s our wrap-up of 2020 telecom M&A, highlighting some of the trends we see.
It’s a long list but certainly not exhaustive of every deal that happened in 2020. There undoubtedly were some additional deals that we didn’t cover.
Big Deals That Closed
Several of the big deals of 2020 were originally announced in 2019, including the T-Mobile/Sprint merger, which closed in April. Since then, Dish purchased the Sprint Boost prepaid wireless business unit from T-Mobile, which was a Sprint/ T-Mobile merger condition.
Another big deal announced in 2019 that closed in 2020 was Wave Broadband’s purchase of Frontier operations in several states. That deal closed in the first half of the year and the former Frontier operations are now known as Ziply. Since then, Ziply acquired Wholesail Networks.
Zayo’s deal to go private through an acquisition by Digital Colony Partners and EQT Infrastructure closed in March 2020. Segra’s plan to purchase North State, also announced in 2019, closed in May.
Investment firms remain focused on broadband and telecom providers. One of the biggest deals of the year is investment firm Stonepeak Infrastructure’s plan to purchase Astound Broadband, owner of RCN, Wave, Grande, and enTouch. That deal is expected to close in the second quarter of this year. EnTouch became part of the Astound earlier this year.
Other investment firm deals announced in 2020 included Wren House Infrastructure Management Limited’s plan to purchase i3 Broadband, GI Partners plan to purchase Vast Broadband, and a deal through which affiliates of APG Group and affiliates of Fiera Infrastructure and Fiera’s senior management team, would acquire the remaining indirect equity interests in Conterra not already owned by Fiera.
Deals calling for investment firms to purchase only a portion of a broadband provider include Searchlight and Consolidated Communications (35%), SDC Capital Partners LLC and ALLO Communications (48%), as well as Morgan Stanley Infrastructures and the Lightpath Fiber Enterprise Business (49.99%).
The mobile provider market already has seen a lot of consolidation, but there was still room for a few deals this year.
In addition to purchasing the Boost prepaid wireless business, Dish also supplemented its holdings by purchasing Ting Mobile, although the main purpose of the purchase may have been to acquire technology developed by Ting’s Tucows unit.
Verizon hopes to boost its own prepaid wireless business with its planned purchase of Tracfone. Verizon also seems to want more control of the rural portion of its wireless business, as it announced acquisition plans involving two rural wireless providers – Bluegrass Cellular and Iowa RSA 2. Verizon already was a part owner in the latter.
T-Mobile also may be seeking greater control over its rural operations with its plan to purchase wireless operations of Shentel, which for years has operated the Sprint mobile network in parts of the mid-Atlantic.
One area where there still seems to be considerable room for consolidation is fixed wireless. Two of the big movers here are Watch Communications and Nextlink – both of whom were big winners in the 2018 Connect America Fund auction.
Nextlink bought another fixed wireless ISP, Xstreamair, and Watch Communications bought Q Wireless, Sit-Co and West Central Ohio Internet.
Serial Consolidators Are Key to Telecom M&A
The names of some of the companies that bought other companies in 2020 are becoming increasingly familiar to those who follow telecom M&A. You could call them serial consolidators and they include:
- Firstlight, which announced plans to purchase the KINBER research and education network, BestWeb, and Primelink
- Hargray, which said it would purchase certain assets from Cable One and acquire Electronet Broadband Communications
- MetroNet, which acquired Jaguar Communications
- Great Plains Communications, which announced plans to purchase Enhanced Telecommunications Corp.
- Everstream, which announced plans to purchase Rocket Fiber and assets from Uniti Fiber
- Atlantic Broadband, which announced plans to purchase Thames Valley Communications
- TDS Telecom closed on its acquisition of Continuum
Another serial consolidator, Cable One, appears to be taking a page from the telecom investment firms and has become increasingly willing to purchase just a portion of a company. Cable One said it would purchase a portion of Nextlink, as well as 45% of Mega Broadband Investments/ Vyve Broadband, with an option to purchase the remainder in 2023.
While the big companies may have grabbed the headlines, there were at least a few M&A deals involving smaller players in 2020. The year started out with Minnesota-based BEVCOMM announcing its acquisition of Lonsdale Telephone Company.
Green Hills Communications said it would buy Citizens Communications of Missouri and in Minnesota, Cooperative Network Services acquired the assets of West Central Transport Group.
Twin Valley Management, owner of Twin Valley Telephone announced a definitive purchase agreement for fellow Kansas company Southern Kansas Telephone. Palmetto Rural Telephone Cooperative, through its subsidiary Palmetto Holdings LLC, acquired a billing and OSS firm in the form of CDG.
Nebraska-based Glenwood Telecommunications purchased the broadband network and customer contracts of Geneva Broadband. C Spire continues its expansion into Alabama with an acquisition of Harbor Communications.
Telecompetitor looks forward to bringing you more telecom M&A coverage in 2021.
A deal was already announced today that calls for ATN International and Freedom3 Capital to purchase Alaska Communications. A previous deal announced last year that would have put Alaska Communications in the hands of Macquarie Capital and GCM Grosvenor was thereby terminated.