Windstream’s newly spun-off REIT Communications Sales and Leasing (CS&L) is already “intensely focused” on M&A plans, CEO Kenny Gunderman has said.
The independent, publically-traded REIT, separated from the US telco and ISP in April, is feeling…
Windstream’s newly spun-off REIT Communications Sales and Leasing (CS&L) is already “intensely focused” on M&A plans, CEO Kenny Gunderman has said.
The independent, publically-traded REIT, separated from the US telco and ISP in April, is feeling the pressure to start making deals, Gunderman said in an interview with Arkansas Business. As such, CS&L has assembled a team of about 35 to focus on seeking out deal opportunities.
Gunderman, brother of Windstream CFO Bob Gunderman, was keen to stress that, given the level of public scrutiny on the company, it is important for it to “show progress” by doing “a good deal”.
CS&L, based in Little Rock, Arkansas, will consider transactions of various sizes, the CEO said, adding that it can be lucrative to put together a series of smaller deals.
“When you consider that the hundreds of privately-owned companies out there in the country today – both copper and fibre – any of these companies are US$50m companies, US$100m companies or smaller and we do not want to ignore that customer base, so transactions of that size are ones we would certainly consider,” he was quoted saying.
Investors’ response to the CS&L, the first REIT dedicated to wireline assets in the US, has been positive so far, Gunderman said. However, he acknowledged that it has been a challenge to explain why a wireline-focused REIT can do as well as REITs for other telecoms assets such as towers.
“We can do so many things to help carriers finance their businesses and so getting out there and telling that story and getting people to understand that has been a big task.”
Windstream has retained control of the spun-off infrastructure, including fibre and copper networks, through a long-term lease with an initial rental payment of US$650m per year.
Gunderman said he expects Windstream will remain a big customer for CS&L for the foreseeable future but noted that both companies want the REIT to broaden its customer base.
