Cogent Communications Holdings, Inc. (NASDAQ: CCOI) says it has agreed to buy T-Mobile's Wireline Business for an undisclosed sum. The deal, which a new subsidiary of Cogent will consummate, is expected to close in the second half of 2023, subject to the usual regulatory approvals and closing conditions.
Cogent will acquire the business unit’s fiber network and related assets as well as what the company called “certain liabilities associated with the business.” The sales agreement also establishes that, post close, Cogent will supply IP transit services to T-Mobile for 54 months for a fee of $700 million. T-Mobile will pay the first $350 million in equal payments over the first 12 months after closing and the final $350 million in equal payments over the remaining 42 months.
The assets include the U.S. long-haul fiber network T-Mobile acquired when it merged with Sprint. Cogent sees the network as initially complementing, then replacing its current current leased network. The company also anticipates an expanded product set, including optical wavelength transport services, to address the needs of new and existing customers, including those that T-Mobile currently serves.
Cogent says it doesn’t expect to issue new debt or equity to finance the acquisition, which the company says shouldn’t prove dilutive to Cogent's existing stockholders. The acquisition also won’t affect current dividend per share, the company adds.
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