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Verizon Expands Chicago Metro Fiber Network PDF Print E-mail
Tuesday, 08 August 2017 11:36

Continuing to scale and accelerate deployment of next-generation broadband services, Verizon Communications Inc. announced a definitive agreement to purchase fiber-optic network assets serving the Chicago market for $225 million.

The seller, WideOpenWest, Inc. (WOW!, NYSE: WOW), is a leading provider of communications services, based in Englewood, Colorado. The transaction is expected to close early in the first quarter of 2018.

“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.”

The agreement includes an additional $50 million in network investment for WOW! to complete the build-out of its Chicago network in second-half 2018.

Verizon will secure fiber to more than 500 macro-cell wireless sites and more than 500 small-cell wireless sites. The WOW! Chicago high-capacity fiber network is designed to support multi-use services. The network already connects Verizon Wireless macro towers and small cells, and will reduce Verizon’s leasing costs.

Reed Smith LLP is Verizon’s legal advisor for the transaction.

The transaction is subject to receipt of various consents and approvals as well as other customary closing conditions and is expected to close by early in the first quarter of 2018. WOW!’s financial outlook for the twelve 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. A portion of the proceeds are expected to be used to pay-down WOW!’s existing debt balances.

“We’re pleased to have reached an agreement to sell our Chicago fiber asset to Verizon,” said Steven Cochran, Chief Executive Officer of WOW!. “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.”

Morgan Stanley & Co. LLC and Kirkland & Ellis LLP served as exclusive financial and legal advisors, respectively, to WOW! as part of this transaction.

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