The Top 10 Telecom Mergers And Acquisitions Of 2021 (So Far)
From the country’s largest carriers, to the regional players, service providers are prioritizing their core telecom businesses through fiber and infrastructure buys, and divestitures of assets unrelated to connectivity. Here’s 10 of the biggest telecom deals we’ve seen so far this year.
Cleaning House
After a year of uncertainty and unexpected changes in plans, divesting and staying true to their roots has been the name of the game for many service providers in the telecom sector.
Some of the country’s largest carriers have made recent moves to help them get back to their core businesses. AT&T, for example, offloaded its WarnerMedia content segment to Discovery for the price of $43 billion. Rival Verizon, on the other hand, picked up a regional carrier in Kentucky to expand its own telecom services footprint. A handful of regional carriers sold off some location-based assets to make room for new growth, while other providers focused on infrastructure buys, like Cisco, which spent $4.5 billion on optical interconnect technologies and Cox Communications, which scooped up a fiber infrastructure provider in April.
While 2021 hasn’t been the year of many crazy-high price tags thus far, there’s still plenty of M&A action in the telecom sector. Here’s a roundup of 10 of the biggest telecom mergers and acquisitions that we’ve seen so far this year.
For more of the biggest startups, products and news stories of 2021 so far, click here.
10. Fusion Connect Sells Canada Business To Distributel
Fusion Connect, a provider of business communications, networking, and hosted collaboration solutions, in January offloaded its Canadian subsidiary, called Primus, for an undisclosed sum.
Distributel, a Canadian telecommunications company headquartered in Toronto, became the new owner of Primus in an all-cash, tax free transaction. The transaction is positioning the new entity as one of the largest competitive telecommunications providers in Canada. Meanwhile, Fusion Connect is able to focus on its core business in the U.S., providing midmarket and enterprise companies with cloud communication, collaboration, security, and network management platforms, the companies said.
The proceeds of the sale, which closed on Jan. 15, are being used to pay down debt, according to Atlanta-based Fusion.
9. Lightpath Announces Three Boston-Area Deals
Lightpath Technologies, a fiber infrastructure connectivity provider, in June revealed not one, but three acquisitions that would bring it past its New York and New Jersey footprint and into the Boston area.
The company in June bought Cambridge Network Solutions (CNS), a second unnamed area connectivity provider, and fiber network assets from Hub Fiber. The CNS and the second acquisitions have closed, while the Hub Fiber purchase is expected to close shortly, according to the companies.
Altogether, Lightpath acquired over 80 route miles of in-place, high-count fiber network, which currently serve over 100 locations, including 12 area data centers, throughout Boston, Cambridge, Somerville, Waltham, Burlington, Billerica, Bedford, and Lowell. Additionally, Lightpath’s network in the region will be connected to its New York Metro network, expanding on the company’s existing 18,000 route miles of fiber serving over 12,000 locations, Orlando, Fla.-based Lightpath said.
8. Zayo To Buy Intelligent Fiber Network
Communications infrastructure provider Zayo Group Holdings Inc. went on an acquisition tear a few years ago, but then took time off to restructure when it faced challenges in the crowded fiber market. The company jumped back into the M&A space in March when it revealed plans to buy Intelligent Fiber Network (IFN).
For an undisclosed sum, Zayo is set to be the owner of IFN, which operates a 5,000 route-mile network serving some 400 customers primarily within Indiana. The deal will add another 1,000 on-net buildings to Zayo’s footprint across Indiana, according to the two companies.
7. Cox Communications Buys Fiber Provider Segra
Carrier giant Cox Communications in April revealed it has inked a definitive agreement to acquire Charlotte, N.C.-based Segra, one of the largest privately held fiber infrastructure providers in the U.S., for an undisclosed sum.
Via the terms of the deal, Cox will acquire Segra’s commercial services segment, which serves enterprise and carrier customers in nine states in the Mid-Atlantic and Southeast with its dense metropolitan fiber network, according to the two companies.
Atlanta-based Cox has made a series of network infrastructure investments in recent years, including EasyTel, EdgeConneX, InSite Wireless, StackPath, Unite Private Networks and ViaWest.
6. Verizon Buys Bluegrass Cellular
Carrier giant Verizon in March officially became the new owner of Bluegrass Cellular’s sales and operations.
Bluegrass Cellular, a rural wireless operator based in Kentucky, has handed its sales and operations assets, as well as the majority of its residents and business users in 34 counties over to Verizon. The Basking Ridge, N.J.-based carrier expects to have Bluegrass’s assets and customers fully integrated into Verizon by the end of 2021.
The two companies did not disclose financial terms of the deal.
5. Wave Broadband Buys Digital West
Wave Broadband, a division of Astound Broadband, in January announced that it has acquired Digital West, a provider of fiber optic connectivity and telecom services for thousands of business customers in California’s Central Coast region.
The combination of Digital West and Wave Broadband’s growing West Coast fiber network will give Digital West customers access to more business connectivity and communication services. Digital West, for its part, operated fiber assets in and around the Central Coast region of California, including Monterey and San Louis Obispo.
The two companies did not disclose financial terms of the deal, which closed in February.
4. Astound Broadband Buys WOW! Service Areas For $661M
At the same time WOW! sold its Cleveland and Columbus markets to Atlantic Broadband, the cable company also entered into another deal with Astound Broadband, a telecommunications holding company, to buy WOW!’s Chicago, Evansville and Anne Arundel service areas for $661 million.
The two deals WOW! Announced in June will free up $1.786 billion in gross proceeds for the cable operator, which serves residential and business users. The two transactions are expected to close in the second half of the year.
3. WOW! Sells Off Markets To Atlantic Broadband for $1.13B
Cable and broadband provider WideOpenWest, Inc., which goes by WOW! entered into a definitive agreement in June with fellow U.S. cable operator Atlantic Broadband, a subsidiary of Cogeco Communications Inc., to sell off its Cleveland and Columbus markets in a transaction valued at
$1.125 billion.
The divested service area sales will allow WOW! to reduce its debt and further pursue greenfield and commercial opportunities as part of its broadband-first strategy, according to Englewood, Colo.-based WOW!, the sixth largest cable operator in the U.S.
2. Cisco Closes Acacia Communications Deal for $4.5B
Cisco has been making strides in the telecom arena in the last two years after introducing its “Internet of the Future” strategy. After an extensive back and forth -- for nearly two years -- the tech giant finally closed its acquisition of Acacia Communications, a supplier of its high-speed, optical interconnect technologies in the Spring.
Cisco first announced plans to buy Acacia Communications for $70 per share in cash in a $2.6 billion deal on a fully diluted basis in July 2019. Acacia in January opted to end the agreement, saying Cisco failed to get approval from the Chinese government’s State Administration for Market Regulation before the termination deadline. Cisco then denied Acacia’s claim filed a lawsuit to enforce the deal, which had a price tag of $2.6 billion at the time. Later in January, the two companies agreed on new terms that would have Cisco agreeing to pay $115 per share for Acacia, well above its original purchase price of $70 per share. Cisco completed and closed the $4.5 billion deal in March 2021.
1. AT&T Sells WarnerMedia To Discovery for $43B
Carrier giant AT&T and television company Discovery Inc. came together in May with a definitive agreement to combine WarnerMedia’s entertainment, sports and news assets with Discovery’s nonfiction and international entertainment and sports businesses to create a standalone global entertainment company.
AT&T acquired its WarnerMedia business, which came from its blockbuster Time Warner buy, in 2018 for $85.4 billion. However, the company struggled to balance the needs of its core connectivity business with its plans for growing its content side of the house. As such, AT&T CEO John Stankey in May said AT&T believed it was “time to unleash the media assets” of WarnerMedia to Discovery. Via the terms of the deal, AT&T is receiving $43 billion in a combination of cash, debt securities, and WarnerMedia’s retention of certain debt, according to the companies.
The new deal between WarnerMedia and Discovery will form one of the largest global streaming players on the market. Discovery’s President and CEO David Zaslav will lead the newly formed company alongside executives from both companies, who are taking on leadership roles within the new company, AT&T and Discovery said.