By Jeremy Nobile, Crain’s Cleveland Business
With a focus on the key metros of Pittsburgh and Philadelphia, Everstream has announced an expansion into Pennsylvania via an acquisition of assets of Uniti Group and subsidiary Uniti Fiber.
The deal adds more than 5,600 route miles for the Cleveland-based internet provider, which the company says expands its network size by 35%.
The acquisition is slated to close pending regulatory approvals in the second quarter of 2021.
Here’s how Uniti Group (NASDAQ: UNIT) describes the deal in its third-quarter earnings report: “As part of the transaction, Uniti will enter into two 20-year IRU (Indefeasible Right of Use) lease agreements with Everstream on Uniti owned fiber. Concurrently, Uniti has agreed to sell its Uniti Fiber Northeast operations and certain dark fiber IRU contracts acquired as part of the Windstream settlement to Everstream. Total cash consideration, including upfront IRU payments, is approximately $135 million. In addition to the upfront proceeds, Uniti will receive fees of approximately $3 million annually from Everstream over the initial 20-year term of the IRU lease agreements, subject to an annual escalator of 2%.”
The new markets will be connected to Everstream’s existing network, which is continually expanding across the Midwest.
Supporting this expansion is Everstream owner AMP Capital, which acquired a 100% stake in the company in September 2018. Everstream announced in 2019 it would be investing $300 million in these ongoing expansion efforts.
“Everstream’s acquisition of the Uniti network assets in Pennsylvania provides reach into new markets, from which we will continue to densify the network,” said Everstream president and CEO Brett Lindsey in a statement. “The network spans the state, and these markets will now experience Everstream’s unrivaled commitment to customer service, and the unique way in which we deliver services.”
Everstream will also open new support offices in Pittsburgh and Philadelphia as part of its investment.
The company said it has completed two acquisitions, opened five new offices and “onboarded” 130 employees since roughly this time last year. The company reports a network of more than 15,000 route miles offering speeds of up to 100 Gbps.
Everstream hired an executive vice president of corporate development in July to help oversee its growth strategies and closed a fundraise of $342.5 million in debt in April to further support those plans.