Following a trend of moving forward digital assets, Brookfield Infrastructure Partners, which owns and operates assets in the utilities, transport, energy and data infrastructure sectors, announced it would acquire Cincinnati Bell, Inc. for $2.6 billion, including debt. Every issued and outstanding Cincinnati Bell common stock will be converted into the right to receive $10.50 in cash when the transaction closes.
“After thoroughly reviewing a range of strategic alternatives and possible business opportunities for maximizing value, the Board determined this transaction was in the best interest of the company, its shareholders, and its customers,” Cincinnati Bell Board of Directors Lynn A. Wentworth said in a statement. “The transaction provides clear and immediate value at an attractive premium and represents an exciting new chapter for Cincinnati Bell.”
“The transaction strengthens our financial position, enabling accelerated investment in our strategic products that is not presently available to Cincinnati Bell as a standalone company,” Leigh Fox, President and Chief Executive Officer of Cincinnati Bell said in a release. “This will allow us to drive growth and maximize value over the long term to the benefit of all our stakeholders. With Brookfield Infrastructure’s support, we will be better positioned to deliver next generation, integrated communications for our customers through an expanded fiber network.”
Brookfield to bring expertise, resources to Cincinnati Bell
Brookfield Infrastructure’s industry expertise and track record of investment in critical data service and infrastructure was another reason why Cincinnati Bell agreed to the this deal, according to Fox. The company will now have access to financial, management and other resources that will allow it to enhance its networks and services to benefit its customers in Hawaii, Ohio, Kentucky, and Indiana and across the U.S.
Cincinnati’s vast network was appealing to Brookfield Infrastructure
Meanwhile, Cincinnati Bell owns and operates the leading data transmission and distribution network in Cincinnati, OH and Hawaii with a footprint of more than 1.3 million homes, which made it attractive to Brookfield Infrastructure. Cincinnati Bell currently delivers core fiber broadband, video and voice services to residential and enterprise customers. The company is also undergoing a transformation to upgrade its network to next generation fiber, which will be instrumental to supporting the growing demand for data and the advent of 5G. To this point, Cincinnati Bell has “future-proofed” 50 percent of its network, that represents more than 17,000 miles of dense metro and last-mile fiber. The company also plans to further upgrade its network during the next few years.
Cincinnati Bell’s continuous fiber upgrade allows it to provide utility-like services for broadband and data, generating stable and expanding cash flows.
Brookfield’s acquisition is expected to close by the end of 2020. The transaction is subject to customary closing conditions, including Cincinnati Bell’s shareholder approval, expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and certain regulatory approvals.
“This investment represents an opportunity for Brookfield Infrastructure to acquire a great franchise and leading fiber network operator in North America,” said Brookfield Infrastructure Chief Executive Officer Sam Pollock said in a statement. “We are excited to leverage our operating expertise to work with the company’s management team as it completes its industry-leading fiber optic rollout plan. Cincinnati Bell is a great addition to our data infrastructure portfolio and we expect it will contribute strong utility-like cash flows with predictable growth.”