Ntelos to sell towers to Grain Management for $41 million
Regional telecommunications operator Ntelos announced it has reached an agreement to sell up to 103 of its towers to an affiliate of private-equity firm Grain Management for approximately $41 million. As part of that deal, Ntelos will enter into a lease agreement to continue accessing those towers in serving its western markets.
Ntelos had been rumored to be looking at selling off some of its tower assets in an attempt to bolster its bottom line. The carrier late last year announced plans to sell spectrum holdings covering its eastern markets to T-Mobile US as part of Ntelos’ exit from those areas. That deal is expected to generate $56 million.
“Today’s announcement of an agreement to sell these towers reflects an opportunistic sale of nonstrategic assets and is consistent with our previously stated strategic objectives,” said Michael Huber, chairman of the board of Ntelos Holdings, in a statement. “We expect the proceeds from the sale will enhance our financial flexibility to continue executing our strategic refocus on our western markets.”
Ntelos’ eastern markets include operations across eastern Virginia, while its western markets include operations covering western parts of Virginia and West Virginia.
Grain Management has been in the middle of numerous industry merger and acquisition activities. Last year Grain was part of Cincinnati Bell Wireless’ deal with Verizon Wireless to exit the mobile business.
Ntelos continues to shift operations
Ntelos has seen its competitive position threatened over the past year, as many of its larger rivals have expanded coverage into rural markets. Ntelos signaled a change of direction last summer when long-time CEO James Hyde left the company just as the carrier posted mixed second-quarter financial results. Hyde had overseen dramatic moves by the company, including its decision in late 2010 to split up its wireline and wireless divisions, as well as signing the network deal with long-time network partner Sprint, which runs through 2022.
Ntelos has moved to diversify its offerings and partnerships, announcing an expansion last year of a fixed LTE deployment with Dish Network. The service, which was initially announced in 2013, uses LTE technology in the 2.5 GHz spectrum band, which Ntelos controls, to connect to outdoor routers that receive signals from Ntelos’ tower sites.
As part of the tower announcement, Ntelos also released preliminary fourth-quarter operating results for its western market. The carrier said it added 5,000 net customers during the final three months of the year, down from the 7,300 net customers added during Q4 of 2013. For the full year, net customer additions dipped from 19,000 subscribers in 2013 to 14,600 net customer additions last year.
Looking ahead, Ntelos said its full-year adjusted earnings before interest, taxes, depreciation and amortization guidance should be at the midpoint of its previous guidance, or around $130 million. That result will include operations across both its eastern and western markets.
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