Frontier Communications Corp said on Wednesday it would sell its telecom assets in four U.S. states for $1.35 billion to private investment firms WaveDivision Capital LLC and Searchlight Capital Partners LLC.
Shares of the company jumped 17.3% to $2.03 in trading before the bell.
Under the deal, Frontier will sell its operations in Washington, Oregon, Idaho and Montana that together served more than 350,000 residential and commercial customers and accounted for $619 million in revenue as of March 31.
“The sale of these properties reduces Frontier’s debt and strengthens liquidity,” said Frontier Chief Executive Officer Dan McCarthy.
Frontier, which had long-term debt of $16.53 billion as of March 31, suspended its dividend in February to repay a portion of its debt.
The high-speed internet business has attracted new investment from PE firms in recent years, as consumers increasingly turn to the internet from cable to stream content, and businesses require more bandwidth for their data.
The deal is expected to close within one year.
WaveDivision is based in Kirkland, Washington and focuses on the broadband industry.
Evercore and Cravath, Swaine & Moore LLP advised Frontier. WDC and Searchlight were advised by Bank of America, Credit Suisse, Deutsche Bank and Paul, Weiss, Rifkind, Wharton & Garrison LLP.―Reuters