Verizon to acquire Frontier
Verizon Communications Inc. (VZ) has announced a $20 billion all-cash acquisition of Frontier Communications Parent, Inc. (FYBR), the largest pure-play fiber internet provider in the U.S. This strategic move will significantly expand Verizon's fiber footprint across the nation, adding 2.2 million fiber subscribers and extending its network reach to 25 million premises across 31 states and Washington, D.C. The acquisition is expected to be accretive to Verizon's revenue and Adjusted EBITDA growth upon closing, with projected annual run-rate cost synergies of at least $500 million. The transaction, valued at $38.50 per share, represents a 43.7% premium to Frontier's 90-day volume-weighted average share price. Verizon aims to enhance its competitive position, offering premium mobility and broadband services to more customers nationwide.
Verizon Communications Inc. (VZ) ha annunciato un acquisizione in contante di 20 miliardi di dollari di Frontier Communications Parent, Inc. (FYBR), il più grande fornitore puro di internet in fibra negli Stati Uniti. Questa mossa strategica espanderà significativamente la presenza di fibra di Verizon nel paese, aggiungendo 2,2 milioni di abbonati alla fibra e aumentando la portata della sua rete a 25 milioni di abitazioni in 31 stati e Washington, D.C. Si prevede che l'acquisizione contribuirà alla crescita del fatturato e dell'EBITDA rettificato di Verizon al momento della chiusura, con sinergie di costo annuali previste di almeno 500 milioni di dollari. La transazione, valutata 38,50 dollari per azione, rappresenta un premio del 43,7% rispetto al prezzo medio ponderato per volume delle ultime 90 giornate di Frontier. Verizon mira a rafforzare la sua posizione competitiva, offrendo servizi di mobilità e banda larga di alta qualità a un numero maggiore di clienti in tutto il paese.
Verizon Communications Inc. (VZ) ha anunciado una adquisición en efectivo de 20 mil millones de dólares de Frontier Communications Parent, Inc. (FYBR), el mayor proveedor puro de internet por fibra en EE. UU. Este movimiento estratégico ampliará significativamente la presencia de fibra de Verizon en el país, añadiendo 2.2 millones de suscriptores de fibra y extendiendo su red a 25 millones de locales en 31 estados y Washington D.C. Se espera que la adquisición contribuya al crecimiento de los ingresos y del EBITDA ajustado de Verizon al cerrar, con sinergias de costo anuales proyectadas de al menos 500 millones de dólares. La transacción, valorada en 38.50 dólares por acción, representa un premio del 43.7% sobre el precio promedio ponderado por volumen de Frontier en los últimos 90 días. Verizon tiene como objetivo mejorar su posición competitiva, ofreciendo servicios de movilidad y banda ancha premium a más clientes a nivel nacional.
버라이존 커뮤니케이션즈 주식회사 (VZ)는 미국 내 최대 순수 광섬유 인터넷 제공업체인 프론티어 커뮤니케이션스 페어런트 주식회사 (FYBR)의 200억 달러 전액 현금 인수를 발표했습니다. 이 전략적 결정은 버라이존의 광섬유 인프라를 대폭 확장하고 220만 명의 광섬유 가입자를 추가하며 31개 주와 워싱턴 D.C.의 2500만 가구에 네트워크 도달 범위를 넓힐 것으로 기대됩니다. 이번 인수는 완료 시 버라이존의 수익 및 조정 EBITDA 성장에 기여할 것으로 보이며, 연간 예상 비용 시너지는 최소 5억 달러에 이를 것으로 예상됩니다. 거래는 주당 38.50달러에 평가되며, 프론티어의 90일 평균 거래량 가중 주가 대비 43.7% 프리미엄을 나타냅니다. 버라이존은 경쟁 위치를 강화하고 전국적으로 더 많은 고객에게 프리미엄 이동통신 및 광대역 서비스를 제공하는 것을 목표로 하고 있습니다.
Verizon Communications Inc. (VZ) a annoncé une acquisition en espèces de 20 milliards de dollars de Frontier Communications Parent, Inc. (FYBR), le plus grand fournisseur de fibre internet pur aux États-Unis. Ce mouvement stratégique étendra considérablement l'empreinte fibre de Verizon à travers le pays, ajoutant 2,2 millions d'abonnés à la fibre et élargissant sa portée à 25 millions de locaux dans 31 États et à Washington D.C. L'acquisition devrait contribuer à la croissance du chiffre d'affaires et de l'EBITDA ajusté de Verizon une fois finalisée, avec des synergies de coûts annuelles prévues d'au moins 500 millions de dollars. La transaction, évaluée à 38,50 dollars par action, représente un premier de 43,7% par rapport au prix moyen pondéré par volume de Frontier sur 90 jours. Verizon vise à renforcer sa position concurrentielle en offrant des services de mobilité et de large bande de haute qualité à un plus grand nombre de clients à l'échelle nationale.
Die Verizon Communications Inc. (VZ) hat eine barzahlung für die Übernahme von 20 Milliarden Dollar von Frontier Communications Parent, Inc. (FYBR) angekündigt, dem größten Anbieter von reinem Glasfaserinternet in den USA. Diese strategische Entscheidung wird Verizons Glasfaserpräsenz erheblich erweitern, indem 2,2 Millionen Glasfaserabonnenten hinzugefügt und die Netzwerkreichweite auf 25 Millionen Haushalte in 31 Bundesstaaten und Washington D.C. ausgedehnt wird. Die Übernahme wird voraussichtlich Verizons Umsatz- und bereinigtes EBITDA-Wachstum bei Abschluss fördern, mit geschätzten jährlichen Kostensynergien von mindestens 500 Millionen Dollar. Die Transaktion, die mit 38,50 Dollar pro Aktie bewertet wird, stellt eine 43,7% Prämie auf den volumenangewendeten 90-Tage-Durchschnittspreis von Frontier dar. Verizon strebt an, seine Wettbewerbsposition zu stärken, indem es einer größeren Anzahl von Kunden im ganzen Land hochwertige Mobilitäts- und Breitbanddienste anbietet.
- Acquisition expands Verizon's fiber network, adding 2.2 million fiber subscribers
- Expected to be accretive to revenue and Adjusted EBITDA growth upon closing
- Projected to generate at least $500 million in annual run-rate cost synergies
- Extends Verizon's network reach to 25 million premises across 31 states and Washington, D.C.
- Enhances Verizon's competitive position in more markets throughout the United States
- Potential for increased customer loyalty and improved churn rates for postpaid mobility
- Substantial acquisition cost of $20 billion
- Transaction closure expected in approximately 18 months, subject to regulatory approvals
- Potential integration challenges merging two large networks and customer bases
- Increased debt load for Verizon to finance the all-cash transaction
This acquisition marks a significant strategic move for Verizon, substantially expanding its fiber footprint and customer base. The
Key financial implications include:
- Expected accretion to Verizon's revenue and Adjusted EBITDA growth upon closing
- Projected
$500 million in annual run-rate cost synergies by year three - Maintenance of Verizon's strong balance sheet and capital allocation priorities
While the deal appears strategically sound, investors should monitor integration challenges and regulatory approval processes, which could impact the 18-month estimated closing timeline.
This acquisition is a game-changer in the telecom landscape, significantly boosting Verizon's competitive position. By integrating Frontier's 2.2 million fiber subscribers and extensive network, Verizon will expand its reach to 25 million premises across 31 states, enhancing its ability to offer premium broadband and mobility services.
The deal aligns with the industry trend of converging fixed and mobile networks, potentially allowing Verizon to:
- Improve customer retention through bundled services
- Accelerate 5G deployment leveraging Frontier's fiber backbone
- Enhance its edge computing capabilities for AI and IoT applications
However, the success of this merger will hinge on Verizon's ability to efficiently integrate Frontier's operations and capitalize on cross-selling opportunities in new markets.
This acquisition positions Verizon to capitalize on the growing demand for high-speed internet and converged services. By combining Frontier's fiber network with its mobile assets, Verizon can potentially:
- Increase market share in the broadband sector
- Improve customer loyalty through bundled offerings
- Enhance its competitive edge against cable operators and other telecom giants
The deal's timing is strategic, aligning with the increasing importance of reliable connectivity for remote work, education and digital services. However, potential challenges include regulatory scrutiny and integration complexities. Investors should watch for Verizon's ability to execute its cross-selling strategy and achieve the projected synergies, which will be important for realizing the full value of this significant investment.
Expands fiber network to accelerate offering of premium broadband and mobility services to more customers nationwide
Key Highlights:
- Increases scale with 2.2 million fiber subscribers and will extend Verizon’s network reach to 25 million premises across 31 states and Washington, D.C.
- Transaction valued at
$20 billion , expected to be accretive to revenue and Adjusted EBITDA growth upon closing - Verizon reaffirms full-year 2024 guidance
- Projected to generate at least
$500 million in annual run-rate cost synergies - Verizon to host investor conference call today at 8:00 AM Eastern Time
NEW YORK and DALLAS, Sept. 05, 2024 (GLOBE NEWSWIRE) -- Verizon Communications Inc. (NYSE, NASDAQ: VZ) and Frontier Communications Parent, Inc. (NASDAQ: FYBR) today announced they have entered into a definitive agreement for Verizon to acquire Frontier in an all-cash transaction valued at
The combination will integrate Frontier’s cutting-edge fiber network into Verizon's leading portfolio of fiber and wireless assets, including its best-in-class Fios offering. Over approximately four years, Frontier has invested
“Connectivity is essential in nearly every part of our lives and work, and no one delivers better than Verizon,” said Verizon Chairman and CEO Hans Vestberg. “Verizon offers more choice, flexibility and value, and we continuously look for ways to provide the best product and network experience to our customers as we bolster our position as the provider of choice.”
Vestberg added: “The acquisition of Frontier is a strategic fit. It will build on Verizon’s two decades of leadership at the forefront of fiber and is an opportunity to become more competitive in more markets throughout the United States, enhancing our ability to deliver premium offerings to millions more customers across a combined fiber network.”
“Less than four years ago, we set out an ambitious plan to Build Gigabit America, the digital infrastructure this country needs to thrive for generations to come,” said Nick Jeffery, President and CEO of Frontier. “Today’s announcement is recognition of our progress building a best-in-class fiber network and delivering reliable, high-speed broadband to millions of customers across the country. It’s also a vote of confidence for the future of fiber. I am confident that this delivers a significant and certain cash premium to Frontier’s shareholders, while creating exciting new opportunities for our employees and expanding access to reliable connectivity for more Americans.”
Customer and Strategic Benefits:
- Extends Verizon premium offerings and experience to Frontier’s consumer and small business customers. Frontier customers and those previously outside Verizon’s fiber footprint are expected to gain more choice and access to Verizon’s premium mobility, home internet, streaming and connected home offerings, alongside premium business products like Verizon Business Complete.
- Creates market-leading broadband network with superior scale and distribution. Frontier’s consumer fiber network, one of the largest and fastest-growing nationally, can be immediately and seamlessly integrated upon closing directly into Verizon’s award-winning Fios network, meeting existing Fios standards. Today, Verizon and Frontier have approximately 10 million fiber customers across 31 states and Washington D.C. with fiber networks passing over 25 million premises, and both companies expect to increase their fiber penetration between now and closing.
- Unites Frontier’s premium broadband offering with Verizon’s premium mobile offering. Combined Mobile and Home Internet customers show increased loyalty and have an improved rate of churn by approximately
50% for postpaid mobility, which is expected to improve Verizon’s mobility economics. - Increases reach across more markets. Verizon will gain access to Frontier’s high-quality customer base in markets highly complementary to Verizon’s core Northeast and Mid-Atlantic markets. Frontier’s footprint offers substantial room for increased penetration in both fiber and mobility services and Verizon is well positioned with stores throughout Frontier’s territory.
- Aligns with Verizon’s long-term strategic plan. The acquisition of Frontier is consistent with Verizon’s core strategy of growing and strengthening customer relationships. This transaction is expected to expand Verizon’s share of the nationwide broadband market, building upon Verizon’s two decades of leadership at the forefront of fiber.
Substantial Financial Benefits:
- Accretive to Verizon’s earnings. The transaction is expected to be accretive to Verizon's revenue and Adjusted EBITDA growth rates upon closing.
- Drives significant cost synergies. Verizon expects to realize at least
$500 million in run-rate cost synergies by year three from benefits of increased scale and distribution and network integration. - Maintains Verizon’s financial strength, flexibility and consistent capital allocation approach. Following the closing of the transaction, Verizon will continue to have a strong balance sheet and liquidity profile. The company will maintain its capital allocation priorities, characterized by prudent investment in the business, a commitment to maintaining an industry-leading dividend and continued debt reduction.
Additional Transaction Details:
Under the terms of the agreement, Verizon will acquire Frontier for
The transaction has been unanimously approved by the Verizon and Frontier Boards of Directors. The transaction is expected to close in approximately 18 months, subject to approval by Frontier shareholders, receipt of certain regulatory approvals and other customary closing conditions.
Verizon Reaffirms Full-Year 2024 Guidance:
- Total wireless service revenue growth2 of 2.0 percent to 3.5 percent.
- Adjusted EBITDA growth3 of 1.0 percent to 3.0 percent.
- Adjusted EPS3 of
$4.50 t o$4.70 . - Capital expenditures between
$17.0 billion and$17.5 billion . - Adjusted effective income tax rate3 in the range of 22.5 percent to 24.0 percent.
Advisors:
Centerview Partners LLC and Morgan Stanley & Co. LLC acted as financial advisors to Verizon and Debevoise & Plimpton LLP acted as legal counsel. PJT Partners served as financial advisor to the Strategic Review Committee of the Board of Directors of Frontier, and Barclays served as financial advisor to Frontier. Cravath, Swaine & Moore LLP served as legal advisor to Frontier, and Paul, Weiss, Rifkind, Wharton & Garrison LLP served as legal advisor to the Strategic Review Committee of the Board of Directors of Frontier.
Conference Call Information:
Verizon management will conduct a conference call today, September 5, 2024, at 8:00 AM Eastern Time to discuss this announcement. Access to a live audio webcast and slide presentation will be available on its Investor Relations website, https://www.verizon.com/about/investors. An archive of the webcast will be available on the website.
1 Metrics reflect an aggregation of Consumer and Business segments.
2 Total wireless service revenue represents the sum of Consumer and Business segments.
3 Non-GAAP financial measure. See www.verizon.com/about/investors for additional information about non-GAAP financial measures cited in this document. The company does not provide a reconciliation for any of these adjusted (non-GAAP) forecasts because it cannot, without unreasonable effort, predict the special items that could arise, and the company is unable to address the probable significance of the unavailable information.
About Verizon
Verizon Communications Inc. (NYSE, Nasdaq: VZ) powers and empowers how its millions of customers live, work and play, delivering on their demand for mobility, reliable network connectivity and security. Headquartered in New York City, serving countries worldwide and nearly all of the Fortune 500, Verizon generated revenues of
VERIZON’S ONLINE MEDIA CENTER: News releases, stories, media contacts and other resources are available atverizon.com/news. News releases are also available through an RSS feed. To subscribe, visit www.verizon.com/about/rss-feeds/.
About Frontier
Frontier (NASDAQ: FYBR) is the largest pure-play fiber provider in the U.S. Driven by our purpose, Building Gigabit America®, we deliver blazing-fast broadband connectivity that unlocks the potential of millions of consumers and businesses. For more information, visit www.frontier.com.
Verizon Contacts
Investor Relations
Brady Connor
george.connor@verizon.com
Media
Katie Magnotta
katie.magnotta@verizon.com
Frontier Contacts
Investor Relations
Spencer Kurn
spencer.kurn@ftr.com
Media
Chrissy Murray
chrissy.murray@ftr.com
Forward-Looking Statements
In this communication, we have made forward-looking statements. These statements are based on our estimates and assumptions and are subject to risks and uncertainties. Forward-looking statements include the information concerning our possible or assumed future results of operations. Forward-looking statements also include those preceded or followed by the words “anticipates,” “assumes,” “believes,” “estimates,” “expects,” “forecasts,” “hopes,” “intends,” “plans,” “targets” or similar expressions. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. For a discussion of some of the risks and important factors that
could affect such forward-looking statements, see our and Frontier’s most recent annual and quarterly reports and other filings filed with the SEC.
Factors which could have an adverse effect on our operations and future prospects include, but are not limited to, the following: risks relating to the proposed transactions, including in respect of the ability to obtain required regulatory approvals and approval by Frontier’s stockholders, and the satisfaction of other closing conditions on a timely basis or at all; unanticipated difficulties and/or expenditures relating to the proposed transactions and any related financing; uncertainties as to the timing of the completion of the proposed transactions; litigation relating to the proposed transactions; the impact of the proposed transactions on each company’s business operations (including the threatened or actual loss of subscribers, employees or suppliers); the inability to obtain, or delays in obtaining cost savings and synergies from the proposed transactions; incurrence of unexpected costs and expenses in connection with the proposed transactions; risks related to changes in the financial, equity and debt markets; and risks related to political, economic and market conditions. In addition, the risks to which Frontier’s business is subject, including those risks set forth in Part I, Item 1A of Frontier’s most recent Annual Report on Form 10-K and its periodic reports filed with the SEC, could adversely affect the proposed transactions and, following the completion of the proposed transactions, our operations and future prospects.
Important Additional Information and Where to Find It
This press release may be deemed to be in solicitation material in respect of the proposed acquisition of Frontier by Verizon. In connection with the proposed transactions, Frontier intends to file with the SEC a proxy statement on Schedule 14A (the “Proxy Statement”), in preliminary and definitive form, the definitive version of which will be sent or provided to Frontier stockholders. Verizon or Frontier may also file other documents with the SEC regarding the proposed transactions.
This document is not a substitute for the Proxy Statement or any other relevant document which Frontier may file with the SEC. Promptly after filing its definitive Proxy Statement with the SEC, Frontier will mail or provide the definitive Proxy Statement and a proxy card to each Frontier stockholder entitled to vote at the meeting relating to the proposed transactions. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC (WHEN THEY ARE AVAILABLE), AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH RESPECT TO THE TRANSACTIONS BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE TRANSACTIONS AND RELATED MATTERS. Investors and security holders may obtain free copies of the Proxy Statement and other documents that are filed or will be filed with the SEC by Frontier or Verizon (when they are available) through the website maintained by the SEC at www.sec.gov, Frontier’s investor relations website at investor.frontier.com or Verizon’s investor relations website at verizon.com/about/investors.
Participants in the Solicitation
Verizon, Frontier and Frontier’s directors, executive officers and other members of management and employees, under SEC rules, may be deemed to be participants in the solicitation of proxies from the stockholders of Frontier in connection with the proposed transactions. Information about Frontier’s directors and executive officers is set forth in the Frontier Proxy Statement on Schedule 14A for its 2024 Annual Meeting of Shareholders, which was filed with the SEC on April 3, 2024. To the extent holdings of Frontier’s securities by its directors or executives officers have changed since the amounts set forth in such 2024 proxy statement, such changes have been or will be reflected on Initial Statements of Beneficial Ownership on Form 3 or Statements of Change in Ownership on Form 4 filed with the SEC. Additional information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, will be included in Frontier’s definitive Proxy Statement relating to the proposed transactions when it is filed by Frontier with the SEC. These documents (when available) may be obtained free of charge from the SEC’s website at www.sec.gov or Frontier’s website at investor.frontier.com.
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