Uniti Group (NASDAQ: UNIT) announced that it has entered into a definitive agreement to merge with Windstream Holdings II, LLC. The merger combines Uniti’s national wholesale owned fiber network with Windstream’s fiber-to-the-home (FTTH) business to create what the companies are referring to as “a premier insurgent fiber provider” in the U.S. Uniti stated that the combined company, with its scaled facilities-based infrastructure platform, will be uniquely positioned within Tier II and III markets throughout the U.S.
Under the terms of the agreement, which have been unanimously approved by both companies’ Board of Directors, upon closing, existing Uniti shareholders will hold about 62 percent and Windstream shareholders approximately 38 percent of the outstanding common equity of the combined company. Certain of Windstream’s largest shareholders, including Elliott Management, will roll substantially all of their investment value in Windstream into the combined company. The merger is expected to close in the second half of 2025, subject to customary closing conditions, regulatory approvals, and approval by Uniti shareholders.
“As a combined company, we will continue our disciplined growth trajectory while expanding FTTH buildouts and significantly improving our overall financial profile,” comments Kenny Gunderman, Uniti President and CEO. “The demand for fiber broadband has never been greater, and Uniti is now expanding its reach into FTTH with an attractive scaled platform.”
The Uniti and Windstream combination create a fiber provider with roughly $4 billion in revenue and 217,000 fiber route miles covering 47 states within the U.S. Management believes the new combined company will be well-positioned in rapidly growing markets for digital infrastructure services, particularly in Tier II and III markets, with a highly defensible market position as a first mover fiber builder.
The merger combines Uniti’s national wholesale owned network with Windstream’s FTTH business. The combined company will initially serve over 1.1 million customers and 1.5 million existing homes passed, with a particularly strong presence in the Midwest and Southeast. The combined company expects to benefit from an enhanced free cash flow profile, with the ability to expand its FTTH build by up to 1.0 million additional households.
The transaction is expected to be free cash flow accretive following close and will realize additional free cash flow accretion as synergies are achieved. The combination is anticipated to generate up to $100 million of targeted annual opex synergies and $20-$30 million of targeted annual capex savings within 36 months of closing.
Upon closing of this transaction, the combined company will be led by current Uniti executives, Kenny Gunderman, CEO and Paul Bullington, CFO. Certain key members of Windstream’s management team are expected to remain with the combined company as well. The merged company is headquartered in Little Rock, AR, and will continue to operate as Uniti under the ticker, UNIT.
By John Celentano, Inside Towers Business Editor
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