Fiber network consolidation hasn’t been as prevalent as it was a few years back, but it’s still out there. And this week we saw a deal for a significant amount of infrastructure in the Midwest. Shenandoah Telecommunications has announced an agreement to acquire Horizon Telcom.
Horizon Telcom operates middle mile and last mile connectivity throughout the southeastern half of Ohio and extending into Indiana and Pennsylvania. In all their reach touches 9,000 on-net locations with some 7,200 route miles of fiber. They began delving into FTTH in the last few years, now passing 14,000 homes and businesses in its ILEC footprint. They also have several grants in place for new middle mile infrastructure in underserved parts of Ohio.
For Shentel the deal gives them a new beachhead for their own FTTH business, Glo Fiber, while complementing their own 9,000 route miles of regional fiber infrastructure. Shentel’s footprint is centered around underserved regions of Virginia and West Virginia, and Horizon’s footprint is pretty much directly adjacent.
In terms of financials, the deal will cost Shentel some $385M with $305M of that in cash and the rest in stock. Horizon had $64.7M in revenue and $19.0M in adjusted EBITDA in 2022. Horizon expects to find $10M in annual run-rate synergies and will take advantage of Horizon’s NOLs and deferred interest deduction carryforwards.
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