Shenandoah Telecommunications Company Completes Sale of its Towers
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The divestiture of Shentel's Tower Portfolio for $309.9 million in cash is a strategic move that unlocks capital for the company. By liquidating a tangible asset, Shentel gains liquidity, which can be immediately redeployed to fund its acquisition of Horizon Telcom. This acquisition is a clear indicator of Shentel's commitment to expanding its service offerings and potentially increasing its market share in the telecommunications sector.
From a financial standpoint, the cash infusion from the sale could strengthen Shentel's balance sheet, potentially improving its creditworthiness and investor appeal. However, the loss of revenue from the Tower Portfolio must be balanced against the future revenue expected from the expansion of Glo Fiber. Investors should monitor how quickly Shentel can scale its fiber operations and whether this expansion can offset the divested tower revenues.
The push towards a fiber-first strategy highlights Shentel's response to the growing demand for high-speed internet. By planning to expand Glo Fiber to around 600,000 homes and businesses by 2026, Shentel is aiming to capitalize on the shift towards remote work, online education and streaming services that require robust internet infrastructure.
While the expansion is ambitious, it's essential to consider the competitive landscape. Larger players with more substantial resources could pose a threat to Shentel's market penetration efforts. Additionally, the success of this strategy hinges on execution and the ability to deliver quality service to new customers. Market reception to Glo Fiber's expansion will be a critical factor to watch in evaluating Shentel's long-term growth prospects.
The sale of tower assets is becoming an increasingly common practice in the telecommunications industry as companies seek to divest non-core assets and focus on service delivery. Shentel's move aligns with this trend, allowing the company to concentrate on its core competency of providing telecommunications services rather than managing tower infrastructure.
However, this strategy is not without risks. Owning tower assets can provide a stable revenue stream and control over the infrastructure. By selling its towers, Shentel is relying on third-party providers, which could introduce operational risks and potential increased costs in the long term. Stakeholders should assess whether Shentel's management can navigate these challenges and maintain service quality and profitability.
EDINBURG, Va., March 29, 2024 (GLOBE NEWSWIRE) -- Shenandoah Telecommunications Company (“Shentel” or the “Company”) (Nasdaq: SHEN) announced that it has completed the initial closing of the previously disclosed sale of its tower portfolio and operations (“Tower Portfolio”) to Vertical Bridge Holdco, LLC (“Vertical Bridge”) for
“The proceeds from the sale of our Tower Portfolio will be used to fund the previously announced acquisition of Horizon Telcom and provide growth capital to accelerate our fiber-first strategy and planned expansion of Glo Fiber to approximately 600,000 homes and business passings by year-end 2026,” said Shentel’s President and CEO, Christopher E. French.
About Shenandoah Telecommunications
Shenandoah Telecommunications Company (Shentel) provides broadband services through its high speed, state-of-the-art fiber optic and cable networks to customers in the Mid-Atlantic United States. The Company’s services include: broadband internet, video, voice, and fiber-optic Ethernet, wavelength and leasing. The Company owns an extensive regional network with approximately 9,900 route miles of fiber. For more information, please visit www.shentel.com.
This release contains forward-looking statements about Shentel regarding, among other things, its business strategy, its prospects and its financial position. These statements can be identified by the use of forward-looking terminology such as “believes,” “estimates,” “expects,” “intends,” “may,” “will,” “plans,” “should,” “could,” or “anticipates” or the negative or other variation of these or similar words, or by discussions of strategy or risks and uncertainties. The forward-looking statements are based upon management’s beliefs, assumptions and current expectations and may include comments as to Shentel’s beliefs and expectations as to future events and trends affecting its business that are necessarily subject to uncertainties, many of which are outside Shentel’s control. Although management believes that the expectations reflected in the forward-looking statements are reasonable, forward-looking statements are not, and should not be relied upon as, a guarantee of future performance or results, nor will they necessarily prove to be accurate indications of the times at which such performance or results will be achieved, and actual results may differ materially from those contained in or implied by the forward-looking statements as a result of various factors. A discussion of other factors that may cause actual results to differ from management’s projections, forecasts, estimates and expectations is available in Shentel’s filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2023 and our Quarterly Reports on Form 10-Q. Those factors may include, among others, Shentel’s ability to satisfy the closing conditions for subsequent tower sale closings, the ability to obtain the required regulatory approvals and satisfy the closing conditions required for the pending Horizon Telcom acquisition, the closing of the pending Horizon Telcom acquisition may not occur on time or at all, the expected savings and synergies from the pending Horizon Telcom acquisition may not be realized or may take longer or cost more than expected to realize, changes in overall economic conditions including rising inflation, regulatory requirements, changes in technologies, changes in competition, demand for our products and services, availability of labor resources and capital, natural disasters, pandemics and outbreaks of contagious diseases and other adverse public health developments, such as COVID-19, and other conditions. The forward-looking statements included are made only as of the date of the statement. Shentel undertakes no obligation to revise or update such statements to reflect current events or circumstances after the date hereof, or to reflect the occurrence of unanticipated events, except as required by law.
| CONTACT: |
| Shenandoah Telecommunications Company |
| Jim Volk |
| Senior Vice President and Chief Financial Officer |
| 540-984-5168 |
| Jim.Volk@emp.shentel.com |
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