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Windstream has been leasing fiber for Uniti in a wholesale arrangement
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But now, Windstream's and Uniti's fiber assets will be combined
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The combined company will be called Uniti
Uniti Group is going to take over operations of Windstream Holdings in an estimated $13.4 billion deal.
The two companies have been entangled for a long time. Windstream and Uniti used to be combined, but they were split apart before Windstream’s bankruptcy, which concluded in September 2020.
After the bankruptcy restructuring, the private company Windstream became owned by the hedge fund Elliott Management and other former creditors. Elliott also owns a stake in the public company Uniti.
Windstream has been leasing fiber from Uniti in a wholesale arrangement.
But now, the merger will combine Uniti’s national wholesale fiber network with Windstream’s fiber-to-the-home (FTTH) business.
The two companies are coming back together under the Uniti name. And Uniti's leadership will run the company. Uniti President and CEO Kenny Gunderman and CFO Paul Bullington will lead the new entity. “Certain key members of Windstream’s management team are expected to remain with the combined company as well,” said the company’s announcement, without naming specific executives.
Both companies are based in Little Rock, Arkansas, and the Uniti headquarters will remain there.
Uniti shareholders will hold 62% of the outstanding common equity of the combined company, while Windstream shareholders will hold approximately 38%.
Gunderman said, “The combination of Uniti and Windstream also removes several dis-synergies that exist in the current landlord/tenant relationship and greatly enhances Uniti’s optionality for strategic initiatives. We look forward to working with Windstream to create a national fiber powerhouse.”
The combined company will initially serve over 1.1 million customers and 1.5 million existing homes passed with a strong presence in the Midwest and Southeast. Uniti will target the market for digital infrastructure services, particularly in Tier II and III markets.
The combined company plans to expand its FTTH build by up to 1 million additional households.
The transaction is expected to close in about one year. Following the close, the five-person Uniti board of directors will remain in place, and four new directors will join the board.
Kinetic
Windstream’s broadband brand, which is called Kinetic, has been very active with fiber deployments the last couple of years.
In August 2023 it said it would invest around $7.2 million to connect some 3,400 homes, businesses and schools in Georgia’s Chattooga County with high-speed fiber internet as part of the company’s mission to expand gigabit fiber service across its 18-state footprint.
In September 2023 it announced a public-private partnership in Bullitt County, Kentucky to provide high-speed fiber broadband to some 6,300 homes and businesses. Kinetic is investing $4.8 million, while Bullitt County will commit $2 million to support the project.
And in November 2023 Kinetic said it was taking on another public-private fiber partnership in Georgia, this time with help from an electric cooperative.
The project will cost $32.5 million and aims to connect a total of 17,000 homes and businesses in Colquitt County. Kinetic will use $21.4 million in state grant money from the American Rescue Plan Act as well as its own investment of $11.1 million.