Zayo Group Holdings, Inc. today announced that it has entered into an agreement to sell Scott-Rice Telephone Co., a Minnesota ILEC (incumbent local exchange carrier), for $42 million to New Ulm Telecom, Inc.
Zayo acquired Scott-Rice Telephone as part of its March 2017 purchase of Electric Lightwave, as we reported in late 2016.
The Electric Lightwave deal focused on fiber assets, and the inclusion of Scott-Rice Telephone was not highlighted at the time. In addition to Scott-Rice, the Electric Lightwave deal provided Zayo with a facilities-based regional fiber network provider with a presence in key West Coast markets including San Francisco, Portland, Seattle, and Sacramento, among others with 8,100 route miles of long haul fiber and 4,000 miles of dense metro fiber.
“This transaction represents further progress toward the separation of our Allstream business,” said Matt Steinfort, Zayo’s CFO, in a prepared statement. “It is consistent with Zayo’s strategic focus on communications infrastructure, and our goal of maximizing the value of our non-core assets.”
Since the acquisition, Scott-Rice Telephone has been managed separately but within Zayo’s Allstream business segment. Scott-Rice Telephone serves residential and business customers in areas of Scott and Rice counties southwest of Minneapolis. Scott-Rice Telephone Co. provides phone, video and internet services with over 18,000 connections, serving the communities of Prior Lake, Savage, Webster, Elko and New Market, Minnesota, according to its new owner New Ulm Telecom.
“New Ulm Telecom, Inc. is very excited about the acquisition of Scott-Rice Telephone Co.” said Bill Otis, President and CEO of New Ulm Telecom, Inc. in a statement. “The additional connections, geographic location and strong relationships with customers position us well to continue our growth strategy.”
New Ulm, Minnesota-based New Ulm Telecom operates several ILECs as wholly-owned subsidiaries, offers a triple play bundle and is a wireless reseller. The closing of the transaction is subject to regulatory approvals and customary closing conditions, and is expected to occur in the June 2018 quarter.