WideOpenWest (WOW!), a provider of Internet, cable TV and voice services based in Englewood, Colorado, announced that it has entered into a definitive agreement to sell a portion of its fibre network in its Chicago market to a subsidiary of Verizon for $225 million in cash.
In addition, WOW! and Verizon will enter into a new agreement pursuant to which WOW! will complete the build-out of the network in exchange for a payment of approximately $50 million (WOW!'s estimated cost for completion of the network build-out), payable as the remaining network elements are completed. The network, expected to be completed in the second half of 2018, will provide backhaul services to over 500 macro-cell wireless sites and more than 500 small-cell sites.
Through the agreement, Verizon will gain a high-capacity fibre network designed to support multi-use services. The company noted that the network already connects Verizon Wireless macro towers and small cells, and will reduce its leasing costs via fibre connectivity to more than 500 macro-cell wireless sites and 500 small-cell wireless sites.
WOW! noted that the transaction is subject to receipt of various consents and approvals, as well as other customary closing conditions, and is expected to close early in the first quarter of next year. WOW! stated that it plans to use a portion of the proceeds from the transaction to pay-down existing debt balances.Commenting on the transaction, Hans Vestberg, Verizon president of Network and Technology, said, "Following recent agreements with Corning, Prysmian and Straight Path, this is another example of Verizon's commitment to invest in multi-use fibre to provide customers with next-generation broadband services, such as smart cities and 5G… this acquisition will also help create comprehensive digital solutions for small- and medium-business and enterprise customers".
