Uniti Group has officially confirmed plans to buy network operator LBNCo following in an effort to boost its burgeoning fibre business.
The company, formerly known as Uniti Wireless, announced it will pay $100 million in total for the fibre-to-the-premises (FTTP) builder and operator five months after its failed attempt to buy the carrier Spirit Telecom.
Sydney-based LBNCo currently offers internet service to 418 multi-dwelling units and 65,000 premises on residential estates, with a pipeline to add a further 22,000 premises over the next two years.
Uniti claimed LBNCo has multiple retail service providers (RSP’s) connected to its network, supplying voice and high-speed data services to consumers and small businesses and projected earnings of $10.1 million this year.
Following the acquisition, LBNCo senior leadership team will remain with the business and have each taken shares of the publicly listed Uniti.
As a result of the deal, Uniti has also divested from a number of Fuzenet customer contracts due to competition law preventing it from owning an FTTP network and selling retail services on it.
The divestments from the Fuzenet contracts, a company Uniti acquired in February this year for $13.2 million, are not expected to make a “nominal” reduction of the company’s earnings this financial year.
“The acquisition of LBNCo is, by every measure, a transformational event for Uniti Group,” Uniti chairman Graeme Barclay said.
“The FTTP network deployed and continuing to be expanded by LBNCo is an asset that we feel very privileged to have secured. This acquisition provides our Company with a platform of growing earnings that will underpin UWL’s continued ambitious growth strategy.”
Uniti halted trading on 16 August in preparation for the potential acquisition.
The Adelaide-based company embarked on a similar trading halt amid speculation around its potential Spirit Telecom acquisition, a move rejected by Spirit shortly after.
Meanwhile, in June, the publicly-listed broadband provider acquired Fone Dynamics in a deal worth up to $8.4 million.