Everstream, a fiber provider focused on businesses, has reached an agreement to sell all of its operations to an affiliate of Bluebird Fiber, a move it said will enable it to advance its strategy with a strong financial position.
The deal with Bluebird follows Everstream’s sale of its Illinois and St. Louis metro area networks, as well as its previously announced plan to wind down its Pennsylvania operations.
“As we focus on advancing our core market optimization strategy, we have determined that a sale of our business is the best path to ensure Everstream meets the evolving connectivity needs of the businesses we serve for years to come,” said Everstream CEO Ken Fitzpatrick. “Under new ownership, we can continue to invest responsibly across our core markets for the benefit of our valued customers, employees, and other stakeholders.”
A key aspect of the pending deal is a focus on ensuring consistency for Everstream’s customers, suppliers, and employees.
To complete the deal, Everstream and certain of its affiliates initiated voluntary Chapter 11 proceedings in the United States Bankruptcy Court for the Southern District of Texas. During these proceedings, Everstream will continue to operate as usual, serving its valued enterprise, wireless, and wholesale customers without interruption.
Additionally, the company has secured a commitment for $55 million of new debtor-in-possession (DIP) financing from certain of its existing lenders. This financing, subject to Court approval and when combined with cash on hand, will fund the business through the completion of the sale.
Following an extensive marketing process, the “stalking horse” agreement with Bluebird was reached and provides for the purchase of substantially all assets as well as the assumption of certain liabilities.
Everstream is seeking approval of this agreement under section 363 of the Bankruptcy Code, making it subject to higher or better offers from other interested parties. If Bluebird is ultimately the successful bidder, it intends to retain the vast majority of Everstream’s employees across its markets at close. Completion of the sale to Bluebird, if the successful bidder, is targeted by year-end, subject to satisfaction of all closing conditions, including regulatory approvals.
The company is also filing with the Court a series of customary motions to maintain business-as-usual operations and uphold commitments to its stakeholders during the process. These “first day” motions include requests to continue paying wages and providing benefits to employees in the ordinary course, as well as maintaining existing customer programs. Suppliers and contractors will be paid in the ordinary course for authorized goods received and services rendered after the filing.
By acquiring Everstream, Bluebird will be able to scale its network reach and capabilities.
Everstream currently has 24,000 route miles of fiber and delivers speeds up to 100 Gbps. Its network delivers business fiber services, including dedicated internet access, dark fiber, Ethernet and data center solutions.
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Sean Buckley
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