Shenandoah Telecommunications Company (Shentel) has announced the sale of its tower portfolio and operations to Vertical Bridge Holdco, LLC for $310.3 million in cash. The tower portfolio being sold consists of 226 sites and generated $18.6 million in revenue, $9.5 million of operating income, and $11.6 million of adjusted EBITDA in 2023.
The company expects to pay up to $10 million in 2024 income taxes as a result of the gain on the sale after utilization of net operating loss carryforwards.
Shentel's President and CEO, Christopher E. French, stated that the proceeds from the sale will provide the company with additional growth capital to support the planned expansion of its Glo Fiber line of business to approximately 600,000 homes and business passings by the end of 2026. This is complemented by previously announced $356 million of committed financings supporting the pending acquisition of Horizon Telcom, indicating a well-balanced capital structure and future financial flexibility.
Additionally, Vertical Bridge's President and CEO, Ron Bizick, expressed the company's pleasure in adding the purpose-built broadband telephony towers to its portfolio, noting their high quality and available capacity for additional tenants, as well as their strategic locations in areas that are difficult to build new towers due to zoning restrictions and terrain challenges.
Shentel provides broadband services through its high-speed fiber optic and cable networks in the mid-Atlantic United States, including broadband internet, video, voice, fiber optic ethernet, wavelength and leasing, and tower colocation leasing. The company owns an extensive regional network with approximately 9,900 route miles of fiber and 219 macro cellular towers.
The market has reacted to these announcements by moving the company's shares 2.8% to a price of $19.18. For more information, read the company's full 8-K submission here.
