Uniti Group has struck a definitive agreement to buy Gulf Coast data transport provider Southern Light in a deal worth $700 million.
The acquisition will see Southern Light integrated with Uniti Fiber, boosting the unit’s revenues to $1.2 billion. Windstream spin-off Uniti rebranded from Communication ales & Leasing in February.
Southern Light offers data transport services along the Gulf Coast region, with a network made up of nearly 540,000 fibre strand miles, 5,700 fibre route miles, and more than 4,500 on-net locations.
It serves 12 Tier II and Tier III markets in Alabama, Florida, Georgia, Louisiana and Mississippi, ad include fibre-to-the-tower backhaul, dark fibre, and small cells. Existing customers include a near 1,000 route mile dark fibre network which is provided for an unnamed major wireless carrier, Southern Light claims.
Andy Newton, Southern Light’s chief executive officer, said: “We’re thrilled that this next step in our evolution will benefit our customers and our employees. Combining Uniti’s broad reach and financial capacity with our local market experience and company culture represents a tremendous platform for continued growth.
“We share similar objectives and values and have great respect for what Uniti has achieved and are excited about our future together.”
It is the latest acquisition for Uniti, which offer broadband capacity through three divisions: Uniti Fiber, Uniti Towers, and Uniti Leasing.
The deal follows a similar agreement, announced in February, that will see Uniti buy Hunt Telecom for $170 million in cash and equity.
The combined deals for Hunt and Southern Light will see Uniti Fibre double its operational network to cover more than one million fibre strand miles.
The deal for Southern Light consists of $635 million in cash, and the issuance of 2.5 million shares, and is expected to close in Q3 2017. It includes financial backing from Citigroup Global Markets, JPMorgan Chase Bank, N.A and RBC Capital Markets.
“This acquisition transforms Uniti Fiber into a more competitive provider of fibre infrastructure solutions. Southern Light scales our products and capacity with wireless carriers, enterprise, wholesale, and E-Rate customers across a significantly expanded Uniti Fiber network, and launches us into the important military sector,” said Kenny Gunderman, president and CEO of Uniti.
“Southern Light’s revenues are well diversified, with 50% from national wireless carriers, 30% from wholesale and enterprises, and 14% from government and E-Rate customers. Pro-forma for this transaction and our recently announced acquisition of Hunt Telecommunications, Uniti is expected to increase non-Windstream revenue to approximately 30% of total revenues.”