The service provider has received regulatory approval to sell its ILEC business, which includes consumer, small business, wholesale and copper-based enterprise customers and assets in 20 states to Apollo-owned Brightspeed Internet, in a deal that has been pending since last year.
Lumen Technologies has received its long-awaited approval to sell its current local exchange carrier (ILEC) business in 20 states for $7.5 billion, as a way for the struggling service provider to return to financial growth.
The Federal Communications Commission (FCC) on Monday approved the previously announced sale of the company to Brightspeed Internet, a company created by Apollo Global Management. The investment management firm agreed to acquire Lumen Technologies’ ILEC business, which includes consumer, small business, wholesale and copper-based enterprise customers and assets in 20 states with which it will launch Brightspeed Internet in 2021.
FCC approval closes the book on all final regulatory clearances needed to close the deal. Pending other customary closing conditions, the Apollo Managed Funds transaction is expected to close early in Lumen’s fourth quarter, which begins in early November.
Lumen Technologies To Grow Slumping Enterprise, Midmarket Segments By Retooling Business Units]
Through the terms of the agreement, Lumen will retain its ILEC assets in 16 states, as well as its national fiber routes and international operations. Brightspeed Internet will gain a robust local area network as well as back-office operations and support to meet the growing demand for high-bandwidth connectivity, according to the two companies.
Monroe, La.-based Lumen. during its earnings call with investors in February revealed a plan to return to growth that would consist of two strategies. The first is the company’s investment in next-generation IT solutions. The second is through two strategic sales that the company announced in 2021.
Lumen Technologies earlier this month announced that it had officially closed on the sale of its Latin American operations to Stonepeak for $2.7 billion in cash. The Latin American business, called Cirion, will now operate as an independent portfolio company of Stonepeak.
The major distributions together are worth more than $10 billion and will help the company prioritize strategic fiber investments and grow its enterprise segment, Jeff Storey, Lumen’s president and CEO, said earlier this month.
For Lumen’s second and most recent fiscal quarter that ended June 30, the company reported net income of $344 million compared to $506 million in the same quarter a year ago. Lumen reported total revenue of $4.61 billion and diluted earnings per share of 34 cents, down 6.3 percent from $4.92 billion and 46 cents per share in the second quarter of 2021.
Storey in August said Lumen continues to work through supply chain pressures and inflation-driven cost increases.