Uniti to merge with Windstream

Uniti Group Inc. ("Uniti") (Nasdaq: UNIT) announced today that it has entered into a definitive agreement to merge with Windstream Holdings II, LLC ("Windstream"). Under the terms of the agreement, which have been unanimously approved by both companies' Board of Directors, upon closing, Uniti shareholders will hold approximately 62% of the outstanding common equity of the combined company and Windstream shareholders will hold approximately 38% of the outstanding common equity.

The merger combines Uniti's national wholesale owned fiber network with Windstream's fiber-to-the-home ("FTTH") business to create a premier insurgent fiber provider in the U.S. We believe the combined company, with its scaled facilities-based infrastructure platform, will be uniquely positioned within Tier II and III markets throughout the U.S.

"As a combined company, we will continue our disciplined growth trajectory while expanding FTTH buildouts and significantly improving our overall financial profile. The demand for fiber broadband has never been greater, and Uniti is now expanding its reach into FTTH with an attractive scaled platform. The combination of Uniti and Windstream also removes several dis-synergies that exist in the current landlord/tenant relationship and greatly enhances Uniti's optionality for strategic initiatives. We look forward to working with Windstream to create a national fiber powerhouse that will continue to bridge the digital divide for our customers," commented President and Chief Executive Officer of Uniti, Kenny Gunderman.

Johannes Weber, Portfolio Manager at Elliott Investment Management ("Elliott"), Windstream's largest shareholder, added, "As one of the largest investors in both Uniti and Windstream, we are pleased to support this combination, which has a compelling strategic rationale and creates a significant opportunity for enhanced value creation. We are confident that given Uniti's focused strategy, unique positioning and a proven management team that will draw on leaders from both organizations, the combined company will be well positioned to deliver on its potential."

Strategic and Financial Benefits of the Combination

Transaction Terms

Under the terms of the agreement, Uniti shareholders will receive approximately 62% of the outstanding common equity of the combined company. Windstream shareholders will receive $425 million of cash, $575 million of preferred equity in the new combined company, and common shares representing approximately 38% of the outstanding common equity of the combined company. Windstream shareholders will additionally receive non-voting warrants to acquire up to 6.9% of common shares of the combined company. Uniti expects to fund the $425 million of cash consideration to shareholders of Windstream from operations, revolver borrowings and/or future capital markets transactions.

Certain of Windstream's largest shareholders, including Elliott, which is also a current holder of Uniti's equity and debt, will be rolling substantially all of their investment value in Windstream into the combined company. The transaction structure allows both companies' existing debt structures to remain in-place at closing, reducing financing requirements and costs.

Leadership, Corporate Governance and Headquarters

The combined company will be led by a proven management team that reflects the strengths and capabilities of both organizations. Upon closing of this transaction, the combined company will be led by Kenny Gunderman, Uniti's Chief Executive Officer, and Paul Bullington, Uniti's Chief Financial Officer. Certain key members of Windstream's management team are expected to remain with the combined company as well.   The combined company will continue to operate as Uniti under the ticker "UNIT" and be headquartered in Little Rock, Arkansas.

Following the close of the transaction, the 5-person Uniti Board of Directors (the "Board") will remain in place and four new directors will join the board of the combined company, with two of those directors selected by Elliott and the remaining two directors jointly selected by Uniti and Elliott.

Transaction Timing and Approvals

The merger is expected to close in the second half of 2025, subject to the satisfaction of customary closing conditions, including receipt of regulatory approvals and approval by Uniti shareholders.

Read the press release here.

Uniti