Lumen Closes Sale of Operations In 20 States As Carrier Sharpens Enterprise Focus
Lumen has offloaded its ILEC business in 20 states to Apollo-owned Brightspeed in a deal that the carrier hopes will give it the financial fortitude to go after its multifaceted enterprise growth strategy.
Lumen Technologies, formerly CenturyLink, has finalized the sale of its incumbent local exchange carrier (ILEC) assets in 20 states to Brightspeed, a brand-new company that launched its operations Monday.
The offload will help Lumen, which has struggled in recent years against financial headwinds, to focus its investments on growing its enterprise business through strategic IT services and accelerating adoption of the Lumen platform, the company said in a statement.
The service provider in 2021 unveiled plans to sell its ILEC business, which includes its consumer, small business, wholesale and mostly copper-served enterprise customers and assets in 20 states, to investment management firm Apollo Global Management in a deal valued at $7.5 billion.
As part of the deal closed Monday, Lumen will hold onto its ILEC assets in 16 states, as well as its national fiber routes and its competitive LEC networks, according to the Monroe, La.-based company.
“This is an important step in realizing long-term shareholder value while focusing our portfolio on the strongest growth opportunities, including investments in markets where we can concentrate our resources to reach more customers with maximum efficiency,” said Jeff Storey, Lumen’s president and CEO, in a statement. “Brightspeed has acquired a business with a strong customer base, dedicated employees and a platform for future growth.”
Brightspeed, for its part, is owned by Apollo and is now the fifth largest ILEC in the U.S. with a service territory of more than 6.5 million locations in mainly rural and suburban communities across the Midwest, Southeast and parts of Pennsylvania and New Jersey. Brightspeed will provide internet and voice offerings to residential and small-business customers. The carrier will target enterprises with high-speed connectivity, voice, networking and managed services, Brightspeed said.
Charlotte, N.C.-based Brightspeed will begin building out its fiber network in 13 of the 20 states in its footprint by the end of 2022, the company said.
The closing of the ILEC deal follows the company’s other major divestiture that was announced at the same time. Lumen in July officially closed the sale of its Latin American operations to Stonepeak for $2.7 billion in cash. The Latin American business, called Cirion, is now operating as an independent portfolio company of Stonepeak.
Lumen said last month that tech veteran Kate Johnson has been appointed president, CEO and a member of Lumen’s board of directors effective Nov. 7. She’s succeeding Storey, who is retiring after a 40-year career in telecommunications and technology. Storey will remain with Lumen until Dec. 31 as the company transitions to its new leadership, the company said.