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Cincinnati Bell to Be Acquired by Canadian Firm in $2.6 Billion Deal

Cincinnati Bell is to be acquired by Toronto-based Brookfield Infrastructure in a $2.6 billion deal, the companies announced on Monday.

"After thoroughly reviewing a range of strategic alternatives and possible business opportunities for maximizing value, the Board determined this transaction was in the best interest of the company, its shareholders, and its customers, said Cincinnati Bell Board Chairman Lynn A. Wentworth, in a news release. "The transaction provides clear and immediate value at an attractive premium and represents an exciting new chapter for Cincinnati Bell."

Cincinnati Bell, which departed the mobile phone business in 2014, now operates large data transmission and distribution networks in the Cincinnati area and in Hawaii.

The company is working on an upgrade to its network to next generation fiber which, a news release said, will be critical to support the growing demand for data at the advent of the 5G network.

Brookfield owns and operates infrastructure assets with a portfolio that includes utilities, transport, energy, and data across the globe.

Pursuant to the agreement, each issued and outstanding share of Cincinnati Bell common stock will be converted into the right to receive $10.50 in cash at closing of the transaction. 

The deal was unanimously approved by Cincinnati Bell's board of directors and is subject to closing conditions, including shareholder approval and regulatory approval.

"The transaction strengthens our financial position, enabling accelerated investment in our strategic products that is not presently available to Cincinnati Bell as a standalone company," said Leigh Fox, president and chief executive officer of Cincinnati Bell, in a statement. "This will allow us to drive growth and maximize value over the long term to the benefit of all our stakeholders. With Brookfield Infrastructure's support, we will be better positioned to deliver next generation, integrated communications for our customers through an expanded fiber network. Brookfield Infrastructure provides strong industry expertise with a proven track record of investment in critical data service and infrastructure. The financial, management, and other resources made available to Cincinnati Bell through the acquisition will enhance our networks and services to the benefit of our customers in Hawaii, Ohio, Kentucky, and Indiana, and across the nation."

"This investment represents an opportunity for Brookfield Infrastructure to acquire a great franchise and leading fiber network operator in North America," said Sam Pollock, chief executive officer of Brookfield Infrastructure. "We are excited to leverage our operating expertise to work with the company's management team as it completes its industry-leading fiber optic rollout plan. Cincinnati Bell is a great addition to our data infrastructure portfolio and we expect it will contribute strong utility-like cash flows with predictable growth."

The Transaction is expected to close by the end of 2020.

-Staff report