WOW! (NYSE: WOW) says it has entered into a definitive agreement to sell a portion of its fiber-optic network assets in the company's Chicago market to a subsidiary of Verizon Communications Inc. (NYSE, NASDAQ: VZ) for $225 million in cash. The companies also reached a second agreement that calls for an additional $50 million to enable WOW! to complete the Chicago fiber network build-out in the second half of 2018.
The WOW! Chicago fiber network is designed to support multi-use services. For example, the network will enable backhaul services to over 500 macro-cell wireless sites and more than 500 small-cell wireless sites, says WOW!
Verizon continues to scale and accelerate deployment of broadband services, and says this purchase will reduce its leasing costs, as the network already connects Verizon Wireless macro towers and small cells.
"Following our recent agreements with Corning, Prysmian and Straight Path, today's announcement is another example of Verizon's commitment to invest in multi-use fiber to provide customers with next-generation broadband services, such as smart cities and 5G," said Hans Vestberg, Verizon president of network and technology. "This acquisition will also help us create comprehensive digital solutions for small- and medium-business and enterprise customers."
"We're pleased to have reached an agreement to sell our Chicago fiber asset to Verizon," said Steven Cochran, WOW! chief executive officer. "This transaction is consistent with WOW!'s stated objective of reaching an optimal leverage profile and allows us to continue to focus on areas of growth for residential and commercial services with our internet centric-outlook and emphasis on expanding our markets through edge-out builds."
WOW!'s financial outlook for the 12-month period ending December 31, 2017, previously included revenues and adjusted EBITDA attributable to the network totaling approximately $13.7 million and $13.2 million, respectively. WOW! expects a portion of the proceeds from the sale will be used to pay-down existing debt balances.
The transaction is subject to receipt of customary closing conditions, consents and approvals, and the company expects it to close early in the first quarter of 2018.
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