Alaska-based telco General Communication (GCI) has completed its acquisition of Alaska Communications System’s (ACS) wireless business for US$300m.
GCI has obtained ACS’ 109,000 wireless subscribers and its 33% stake in Alaska Wireless Network…
Alaska-based telco General Communication (GCI) has completed its acquisition of Alaska Communications System’s (ACS) wireless business for US$300m.
GCI has obtained ACS’ 109,000 wireless subscribers and its 33% stake in Alaska Wireless Network (AWN), a joint venture between the two companies.
AWN was set up in June 2012 by merging both telcos’ networks into a single entity in an effort to better compete against national carriers such as Verizon. GCI owned two-thirds of the JV before the closure of the acquisition.
GCI and ACS said in a joint statement that they have agreed upon a service transition plan for the latter’s former customers which will “ensure a seamless continuation of service”.
In its own separate statement, ACS said it will use net proceeds from the transaction to pay down debt, adding that a stronger balance sheet and growth in revenue and earnings better places it to “pursue additional opportunities to create shareholder value”.
“We can now focus on our business broadband and managed IT solutions strategy, which provides our greatest areas of growth and highest levels of profitably,” CEO Anand Vadapalli said.
Announcing the deal last December, ACS said it would enable it to eliminate negative margins associated with the wireless business and realise additional synergies. As such, it said it would target a pro-forma run-rate EBITDA of US$54m and a leverage ratio of 3.1x annual EBITDA.
CFO Wayne Graham noted in the company’s statement yesterday that the operational plan to achieve or surpass these targets is underway.
GCI describes itself as the largest Alaska-based and operated integrated telecoms provider, offering wireless, voice, data and video services state-wide.
