Shrinking Windstream Sells Off EarthLink's Consumer Internet Assets

Less than two years shy of its merger with telecom service provider EarthLink, Windstream is shedding EarthLink's legacy consumer internet business.

Windstream, a provider of networking and communications solutions, has sold EarthLink's consumer internet assets to Dallas-based private equity firm Trive Capital for $330 million in cash, according to the two companies. A Windstream spokesperson told CRN that the deal is “only for the consumer internet business and does not affect the EarthLink business segment.”

The sale comes less than two weeks after Windstream also announced it would sell certain fiber assets in Minnesota and Nebraska to Arvig Enterprises Inc., a Minnesota-based telecom and broadband service provider, for $60.5 million in a deal expected to close during the first half of 2019.

[Related: Windstream, EarthLink To Join Forces In $1.1B Merger]

Little Rock, Arkansas-based Windstream first revealed its plan to buy EarthLink in a $1.1 billion stock transaction in November 2016 that would greatly increase its national footprint. The deal closed in February 2017. Together, Windstream and EarthLink offered a nationwide fiber footprint of 145,000 route miles, which included strategic routes located across the Southeast and Northeast U.S.

Today, Windstream is focused on delivering SD-WAN, unified communications, and other managed services.

"This transaction enables us to divest a non-core segment and focus exclusively on our two largest business units. In addition, it improves our credit profile and metrics in 2019 and beyond," Windstream CEO and President Tony Thomas in a statement about the deal.

EarthLink's consumer internet business provides internet access, online back-up, managed web design, web hosting and various email services to more than 600,000 U.S. customers.

Roughly 41 percent of Earthlink's revenue was generated by enterprise and midmarket customers prior to its merger with Windstream.

Windstream in November posted $1.42 billion in total Q3 2018 revenue, which dropped 5 percent compared to the same period the year before.