Frontier Communications Selling Western Wireline Operations For $1.35 Billion

Frontier Communications is selling off its assets in four states for $1.35 billion to WaveDivision Capital in hopes of strengthening its struggling balance sheet.

Frontier Communications is selling its assets and operations in Washington, Oregon, Idaho and Montana for $1.35 billion in an all-cash deal.

The Stamford, Conn.-based based telecommunications provider has inked an agreement with WaveDivision Capital, a private investment firm focused on the broadband industry, in partnership with Searchlight Capital Partners.

Frontier believes that the deal will help boost its balance sheet, which has been struggling over the past four years.

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Frontier serves more than 350,000 residential and commercial customers in these four states, according to the carrier. This geography brought in $619 million in revenue as of Frontier's most recent financial quarter, which ended March 31, 2019.

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Frontier will continue to operate the business and serve customers until the transaction closes. WaveDivision Capital and Searchlight have created a new company to operate the business and will honor existing customer commitments and contracts after the transaction closes, the two companies said.

Frontier’s network passes through 1.7 million residential and business locations, of which approximately 500,000 are fiber-to-the-premises-capable across the four states, according to the carrier. In addition to its residential services, Frontier Business offers communications solutions to small, medium and enterprise businesses.

“The sale of these properties reduces Frontier’s debt and strengthens liquidity,” said Dan McCarthy, Frontier's president and CEO, in a statement. “We are pleased to have a buyer with extensive experience building and operating advanced fiber-based communications assets in these regions. We will be working very closely with the new owners to ensure a smooth, successful transition for our customers and the communities we serve.”

The deal is subject to regulatory approvals and is expected to close within a one-year period, the companies said.

Frontier in 2015 acquired Verizon's wireline assets in California, Texas and Florida for $10.54 billion. The purchase also included Verizon's TV, landline phone and broadband internet business aimed at consumers and small-business customers, and impacted about 3.7 million voice customers and 2.2 million broadband connections.

The first week that Verizon wireline customers in California, Florida and Texas were switched over to Frontier proved to be a rough time for the provider. The transition prompted widespread service outages across Frontier's then-new markets that lasted about a week.