The 10 Biggest Telecom Acquisitions Of 2017 (So Far)
A Flurry Of Activity
The telecommunications industry is experiencing an influx of mergers and acquisitions, with companies that are both jumping into new business markets and expanding their existing footprint to be more competitive. And with a Federal Communications Commission (FCC) staff at the helm as of January, many believe that it may be easier for carriers to join forces and buy new businesses this year.
There's a lot of activity in this space and, to help make sense of it all, CRN has rounded up the 10 biggest telecom acquisitions of 2017 … so far.
10. GTT Acquires Global Capacity
Telecom service provider GTT Communications announced in June plans to buy network connectivity provider Global Capacity for $100 million in cash and 1.85 million shares of GTT common stock. According to GTT, the deal will help the McLean, Va.-based provider grow its customer base and expand its footprint to 9.6 million business addresses and 41 data center locations.
The deal brings back together assets from telecom service provider MegaPath. GTT bought MegaPath's managed services business, and Global Capacity bought MegaPath's wholesale network in 2015. The deal is expected to close by the end of Q3 2017, according to GTT.
9. Windstream Buys Broadview Networks
In April, Windstream announced its plan to acquire cloud-based unified communications provider Broadview Networks in an all-cash transaction worth $228 million. Windstream said that taking on Rye Brook, N.Y.-based Broadview's technology would advance and expand its own unifed communications (UC) portfolio.
The boards of both companies have approved the transaction, as well as Broadview shareholders holding a majority of the company’s shares. The two companies expect the deal, which is subject to regulatory approvals, to close in the third quarter of 2017.
8. Windstream Merges With Earthlink
At the end of 2016, telecom providers Windstream and EarthLink announced plans to join forces. The merger, valued at $1.1 billion including debt, was completed in February 2017. In the same month, Little Rock, Ark.-based Windstream named its new channel chief of the combined company, EarthLink's former channel chief, Olen Scott.
Via the terms of the deal, Windstream shareholders own approximately 51 percent of the new business, while EarthLink shareholders own about 49 percent.
7. Zayo Closes Electric Lightwave Acquisition
Zayo Group Holdings, Inc. in March closed its $1.42 billion acquisition of Electric Lightwave, the company formerly known as Integra Telecom.
Electric Lightwave is a Vancouver, Wash.-based infrastructure and telecom services provider. Zayo said that the deal adds 8,100 route miles of long-haul fiber and 4,000 miles of dense metro fiber across 35 markets in the western U.S. with on-net connectivity to more than 3,100 business locations and 100 data centers.
In April, Boulder, Colo-based Zayo named former vice president of indirect sales for Electric Lightwave Scott Forbush as its new channel chief.
6. Verizon Closes XO Communications Deal
After a year of regulatory scrutiny, Verizon finally closed its deal with XO Communications in February, buying the provider for $1.8 billion.
After being held up by concerns from the FCC last summer, the deal gained regulatory approval in November. Verizon said it would use Herndon, Va.-based XO Communications' fiber-based IP and Ethernet network assets to better serve its enterprise and wholesale customers in 45 U.S. markets. XO's fiber business will be used to boost Verizon's cell network.
5. Bidding War For Straight Path Ended By Verizon
The battle over Straight Path Communications ended in May when Verizon nearly doubled AT&T's offer, putting $3.1 billion on the table for its valuable -- and hard to come by -- wireless spectrum.
Verizon originally offered $1.8 billion for Straight Path immediately after AT&T announced its intent to acquire the company for $1.6 billion in April. While Straight Path gave AT&T time to answer back, Verizon bested its own offer and ended the monthlong bidding war by submitting a new bid of $3.1 billion.
Verizon said it plans to use Straight Path's assets to boost its 5G strategy.
4. Verizon Closes Yahoo Deal
Nearly a year after telecom giant Verizon first announced it would acquire ailing Internet provider Yahoo, the transaction was closed in June 2017 following a massive security-related setback that caused the industry to wonder whether Verizon would go through with the deal or walk away.
Verizon in July 2016 announced its intent to acquire Yahoo for $4.83 billion in cash for its media assets. In August, a report surfaced revealing that Yahoo's network had been hacked in 2013 and 2014, affecting more than 1.5 billion user accounts in one of the biggest security breaches to date. Following speculation that the Basking Ridge, N.J.-based carrier may choose to dissolve the deal, Verizon successfully renegotiated down Yahoo's buying price to $4.48 billion in February. Verizon plans on combining Yahoo and AOL's assets -- which it purchased in 2015 -- into a new business unit called Oath.
3. T-Mobile Beats Out Competition, Acquires The Most Wireless Spectrum
Wireless provider T-Mobile walked away as the big winner of the U.S. government's $19.8 billion wireless spectrum auction that ended in April. The Bellevue, Wash.-based provider spent $8 billion and acquired the biggest number of spectrum licenses, according to the FCC.
Dish Networks, based in Englewood, Colo. was reported to have placed second, bidding $6.2 billion, and Philadelphia-based Comcast spent $1.7 billion during the auction, the third-place winner.
2. CenturyLink and Level 3 Reveal Merger Close Date
CenturyLink first announced its intent to acquire fellow telecom provider level 3 in a cash and stock deal worth $34 billion in Oct. 2016. This year, Monroe, La.-based CenturyLink has been preparing for the mega-merger by reshuffling its leadership team and gaining the appropriate regulatory approvals. The two companies have both said that the deal would close by Sept. 30, 2017.
CenturyLink found itself in hot water in June when reports surfaced that alleged fraudulent billing practices. The carrier is now the subject of a class-action lawsuit seeking damages as high as $12 billion for its consumer customers. CenturyLink said that once combined with Level 3, the company will gain about 76 percent of its revenues from business customers.
1. AT&T Pushes For Time Warner Merger
AT&T in Oct. 2016 proposed a monster $85.4 billion acquisition of entertainment giant Time Warner Inc. that caused the industry to question whether the deal would harm competition for consumers. Since January however, the regulatory climate has shifted under the FCC under Republican chairmen Ajit Pai, making telecom consolidation more of a possibility.
AT&T in March won the European Commission's approval for the deal. The Dallas-based telecom giant is still waiting for the U.S. Justice Department to finish its review to learn what the requirements of the merger will be, but AT&T believes it will win the necessary approvals by the end of 2017.