Shentel (Shenandoah Telecommunications Company, Nasdaq: SHEN) and Vertical Bridge have reached a Purchase and Sale Agreement whereby Shentel will sell Vertical Bridge its tower portfolio and operations for a cash price of $310.3 million. Customary closing conditions apply to the transaction. On the day of the first closure, Vertical Bridge will provide Shentel the $310.3 million acquisition price.
As soon as the requirements for shutting any remaining locations are fulfilled, further closures will take place. An initial close is anticipated by the company for March 2024. With the use of net operating loss carryforwards, Shentel anticipates that the gain on the sale will result in up to $10 million in income taxes in 2024.
The Shentel Tower Portfolio being sold consists of 226 tower portfolio sites and generated $18.6 million in revenue, $9.5 million of operating income and $11.6 million of Adjusted EBITDA in 2023.
Glo Fiber Business
“Shentel will have more growth capital to support the planned expansion of our Glo Fiber line of business to approximately 600,000 homes and business passings by the end of 2026 thanks to the proceeds from the sale of our Tower business,” said Christopher E. French, president and CEO of Shentel. “We feel our capital structure is well-balanced and will provide future financial flexibility with the anticipated closing of this transaction and the previously announced $356 million of committed financings supporting our pending acquisition of Horizon Telcom.”
“We are happy to expand our offering with the addition of these specially designed broadband telephone towers,” said Ron Bizick, President and CEO of Vertical Bridge. “The towers are excellent assets that have room for more tenants. However, because of zoning regulations and topography difficulties, the buildings are situated in problematic locations where fresh tower construction is not feasible. The portfolio’s geographic concentration offers a unique opportunity for future deployment of existing and new technologies.”
