Fiber M&A: Thermo Shuffles Its Infrastructure Deck

April 25th, 2018 by · 3 Comments

Yet more fiber is changing hands, but in this case isn't going very far. Globalstar has announced an agreement with Thermo Acquisitions to merge with FiberLight and other assets in Thermo's portfolio. But that doesn't mean this was much of a fiber consolidation event once you look at it closely.

Basically, Globalstar is majority owned (53%) by Thermo already. The deal will take FiberLight, 15.5M shares of CenturyLink, a spectrum management company, $100M in cash, and $25M in other complementary businesses and assets, and exchange it for $1.65B in Globalstar common stock, putting everything under the same umbrella. That umbrella will be renamed Thermo Companies, will take over Globalstar's public listing and NOLs, and will have subsidiaries Globalstar, FiberLight, Global SpectrumCo, and Thermo Investments.  Or so it reads to me, feel free to tell me otherwise in the comments.

So in the end we have FiberLight and the other assets being owned by a now publicly traded Thermo and its controlling shareholder Jay Monroe. He'll own 83-87% of the company, with a rights offering in the works for minority shareholders still on deck that may shift things.  The combined company will emerge with a more diverse set of assets and interests in the infrastructure space, spanning satellite, wireline, and spectrum, and it will be able to use Globalstar's $1.7B in US net operating losses across a wider range of businesses.

I don't follow Globalstar much, so I'll leave that to others.  But for metro fiber, not much seems to really happen on the ground (at least right away) except that we get a small snapshot of FiberLight's financials. In 2017, FiberLight generated adjusted EBITDA of $67M and had some $200M in net debt.

FiberLight has long been one of the supra-regional fiber builders and operators that seemed destined to get bought by a national provider, but has somehow stayed largely above the fray.  A massive buildout of fiber across much of Texas took a lot of the company's energy for many years, but things seem to have stabilized and I'm curious to see what they might take aim at next within the new corporate structure.

The deal is anticipated to close in Q3 of this year, assuming there are no speedbumps along the way.  I wonder what Globalstar's minority shareholders will think of the deal...

Categories: Mergers and Acquisitions · Metro fiber · satellite

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