DENVER, Aug. 3, 2021 /PRNewswire/ -- Lumen
Technologies (NYSE: LUMN) today announced it has entered
into a definitive agreement to sell its ILEC (incumbent local
exchange carrier) business, including its consumer, small business,
wholesale and mostly copper-served enterprise customers and assets,
in 20 states to funds managed by affiliates of Apollo Global
Management, Inc. (NYSE: APO) (the "Apollo Funds") for $7.5 billion, including debt assumption of
approximately $1.4 billion, and
subject to working capital and various other purchase price
adjustments.
Under the terms of the transaction, Lumen will retain its ILEC
assets in 16 states, as well as its national fiber routes and CLEC
(competitive local exchange carrier) networks1 as it
delivers the fastest, most-secure platform for next-gen business
applications and data. For Apollo Funds, the transaction will
provide a robust, scaled local network, as well as the operations
and back-office support to meet the accelerating demand for
high-bandwidth connectivity and fiber technology. Assets in the 20
states being acquired include:
- Local fiber and copper network
- Broadband and voice for consumer, enterprise and wholesale
customers
- Fiber and copper connectivity to enabled buildings
- Connectivity to tower sites
- Central offices
"This transaction is an important step in our continued efforts
to transform Lumen and drive future growth for our company," said
Jeff Storey, Lumen president and
CEO. "We are pleased with the attractive valuation we received for
these assets, which highlights the overall value of Lumen's
extensive asset portfolio. Apollo Funds will receive a great
business with a strong customer base, dedicated employees, and a
platform for future growth."
"The team at Lumen has built a great business and we see an
incredible opportunity to provide leading edge, fiber-to-the-home
broadband technology to millions of its business and residential
customers," said Aaron Sobel,
Private Equity Partner at Apollo. "Our investment will help
accelerate the upgrade to fiber optic technologies, and we are
excited to have such a high-caliber management team ready to bring
faster and more reliable internet service to many rural markets
traditionally underserved by broadband providers."
The transaction is expected to be roughly leverage neutral, with
an expected close in the second half of 2022, subject to customary
closing conditions including required regulatory approvals.
Management will discuss this transaction in more detail on the
company's conference call scheduled for this afternoon,
August 3rd, at
5:00pm ET.
Citi, Goldman Sachs, Bank of America, and Morgan Stanley served
as financial advisors to Lumen in the transaction and Jones Walker served as legal counsel. Advisors
to the Apollo Funds include Mizuho, LionTree, Barclays and Credit
Suisse as financial advisors; Altman
Solon as telecommunications, media and technology
consultant; and Paul, Weiss, Rifkind, Wharton & Garrison LLP as
lead legal counsel, together with Jenner & Block LLP and
Morgan Lewis & Bockius LLP as
regulatory counsel.
1 NTD: Lumen will retain CLEC operations in all 36
states.
Additional Resources
- Access our resource page for more information.
- Our 8-K report that we plan to file following this
release.
Second Quarter 2021 Earnings Results
Separately, today the Company reported results for the second
quarter ended June 30, 2021. The
conference call will be streamed live over Lumen's website at
ir.lumen.com this afternoon, August
3rd, at 5:00pm ET.
If you are unable to join the call via the web, the call can be
accessed live at +1 877-283-5145 (U.S. Domestic) or +1 312-281-1201
(International).
About Lumen
Lumen is guided by our belief that humanity is at its best when
technology advances the way we live and work. With approximately
450,000 route fiber miles and serving customers in more than 60
countries, we deliver the fastest, most secure platform for
applications and data to help businesses, government and
communities deliver amazing experiences.
Learn more about the Lumen network, edge cloud, security,
communication and collaboration solutions and our purpose to
further human progress through technology at news.lumen.com/home,
LinkedIn: /lumentechnologies, Twitter: @lumentechco, Facebook:
/lumentechnologies, Instagram: @lumentechnologies and YouTube:
/lumentechnologies. Lumen and Lumen Technologies are registered
trademarks in the United
States.
Forward Looking Statements
Except for the historical and factual information contained
herein, the matters set forth in this press release, including
statements regarding the expected transaction proceeds, timing and
benefits of the proposed transactions, and other statements
identified by words such as "estimates," "expects," "projects,"
"plans," "intends," "will" and similar expressions, are
forward-looking statements within the meaning of the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are subject to a number of risks,
uncertainties and assumptions, many of which are beyond our
control. Actual events and results may differ materially from those
anticipated, estimated or projected if one or more of these risks
or uncertainties materialize, or if underlying assumptions prove
incorrect. Factors that could affect actual results include but are
not limited to: the ability of the parties to timely and
successfully receive the required approvals of regulatory agencies;
the possibility that the purchaser will not be able to finance the
divestiture on the terms contemplated or at all; the possibility
that the anticipated benefits from the proposed transactions cannot
be fully realized in the manner contemplated; the possibility that
it may be more difficult than anticipated to segregate the
Company's divested business from its other businesses in connection
with the divestiture; the possibility that it may be more difficult
than anticipated to segregate the facilities-based business of
Sellers and their subsidiaries from the Company's other businesses
in connection with the Divestiture; the possibility that the
post-closing commercial relationships between the parties will not
operate in the manner currently contemplated; the possibility that
the Company might be required to pay higher than anticipated tax
payments, to make unanticipated payments under the transaction
agreements or to otherwise receive less net cash proceeds than
anticipated; the possibility that the Company's customers, vendors
or employees could react unfavorably to the transaction; changes in
the Company's cash requirements, financial position or business,
operational or financial plans; the effects of competition from a
wide variety of competitive providers; and other risk factors and
cautionary statements as detailed from time to time in the
Company's reports filed with the U.S. Securities and Exchange
Commission. There can be no assurance that the Company's proposed
divestiture will in fact be consummated in the manner described or
at all. You should be aware that new factors may emerge from
time-to-time and it is not possible for us to identify all such
factors nor can we predict the impact of each such factor on the
proposed transactions. You should not place undue reliance on these
forward-looking statements, which speak only as of the date of this
press release. Unless legally required, the Company undertakes no
obligation and expressly disclaims any such obligation to update
publicly any forward-looking statements, whether as a result of new
information, future events or otherwise.
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SOURCE Lumen Technologies