EQT to buy Lumos Networks for $950 million

Lumos Networks Corp. (NASDAQ: LMOS), which supplies fiber-optic network services in the U.S. Mid-Atlantic region, says it has agreed to be sold to European fiber services provider EQT Infrastructure, a unit of the investment firm EQT, for $18.00 per share, or approximately $950 million, in cash. The deal would give EQT a foothold in the U.S.

Lumos Networks Corp. (NASDAQ: LMOS), which supplies fiber-optic network services in the U.S. Mid-Atlantic region, says it has agreed to be sold to European fiber services provider EQT Infrastructure, a unit of the investment firm EQT, for $18.00 per share, or approximately $950 million, in cash. The deal would give EQT a foothold in the U.S.

The $18.00 per Lumos share represents a premium of 18.2% to the closing price of $15.23 on February 17, 2017 and a 34.9% premium to the volume-weighted price average of the last 12 months of $13.35.

Lumos Networks serves carrier, enterprise, and data center customers via a fiber network of 9,204 fiber route miles and 475,507 total fiber strand miles. The company operates in 24 markets in Virginia, Pennsylvania, West Virginia, Maryland, Ohio. and Kentucky. It offers connections to 1,297 unique fiber to the cell sites, 1,642 total FTTC connections, 36 data centers (including seven company owned co-location facilities), 1,984 on-net buildings, and approximately 3,300 total on-net locations.

The company recently made an acquistion of its own to expand its footprint; it also decided to divest it regulated operations (see "Lumos Networks to buy Clarity Communications, divest regulated business").

EQT is an investments firm with approximately EUR 31 billion in raised capital in 21 funds. EQT Funds have portfolio companies in Europe, Asia, and the U.S. EQT has made other investments in communications, including a submarine network operator in Spain (see "EQT buys Spanish cable operator IslaLink"). The fund also owns Broadnet of Norway (and not Finland, which is what we had originally) and IP-Only of Sweden, among other holdings.

"We are excited about the opportunity to acquire Lumos Networks, having been impressed by the company's strategic vision and execution since it became a public company in 2011. We look forward to working collaboratively with Lumos Networks' team and to drawing upon EQT's deep expertise in the telecommunications and fiber sector in support of the company's growth and expansion," said Jan Vesely, director at investment advisor EQT Partners.

The agreement was approved by all members of the board of directors voting on the transaction. Completion of the transaction is subject to shareholder approval, regulatory approval, and other customary closing conditions. The acquisition is expected to be completed during the third quarter of 2017.

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