The Un-carrier will expand its broadband
portfolio and offer more consumers a differentiated experience,
selling fiber internet services provided by the JV using Metronet’s
fiber network deployment and management expertise
T-Mobile (NASDAQ: TMUS), America's 5G leader and fastest-growing
fixed wireless broadband provider, today announced it has entered
into a definitive agreement to establish a joint venture (JV) with
leading global investment firm KKR (NYSE: KKR) that will acquire
Metronet including its broadband infrastructure, rapidly growing
residential fiber business operations and existing customers. As
part of the transaction, the JV will also acquire Oak Hill
Capital’s existing stake. Oak Hill Capital will re-invest to retain
a minority position and founder John Cinelli will also retain a
minority position once the deal closes.
Metronet is uniquely positioned as the fastest-growing pure play
fiber company in the U.S. and an experienced independent
fiber-to-the-home (FTTH) operator. The company currently reaches
more than 2 million homes and businesses across 17 states with
fiber solutions built on a state-of-the art broadband platform.
Following the transaction’s close, Metronet will become a wholesale
services provider for its retail customers and 100% of its
residential fiber retail operations and customers will transition
to T-Mobile. T-Mobile will have full responsibility for residential
customer acquisition and support, leveraging its differentiated
retail, marketing, brand and service model, and will utilize
Metronet’s deep digital and fiber infrastructure expertise to
expand to more households with fiber broadband services. Metronet
will focus on build plans, network engineering and design, network
deployment, and customer installation. Following the transaction
close, Metronet is expected to be self-funding on a go forward
basis and it is expected to reach 6.5 million homes passed by the
end of 2030. To support this business plan T-Mobile does not expect
to make any additional capital contributions to the JV.
“This is a unique opportunity and a smart, capital-efficient
deal that enables T-Mobile to profitably build on our success in
broadband and provide fast, affordable and reliable connectivity
options to millions more customers nationwide as a complement to
our wireless growth strategy,” said Mike Sievert, CEO of T-Mobile.
“Metronet is the perfect partner for T-Mobile as a leader in fiber
solutions with an incredibly fast build pace, and a top-notch
management team. Together with KKR’s strong heritage of corporate
partnership and global fiber franchise, we will further expand the
Un-carrier’s fiber footprint and deliver real value and choice to
customers while addressing a growing demand for fast and reliable
broadband."
“As a leading investor in fiber broadband, KKR has a strong
track record of building fiber networks in multiple countries
around the world. Since our initial investment in Metronet in 2021,
the company has grown rapidly, including constructing new fiber
infrastructure and adding subscribers in attractive, underserved
markets,” said Waldemar Szlezak, Partner, and Global Head of
Digital Infrastructure at KKR. “Our new joint venture with T-Mobile
will be transformational for the future of the Metronet business.
We look forward to benefitting from T-Mobile’s industry-leading
customer experience to support the company in reaching its full
potential.”
The JV will be complementary to T-Mobile’s already existing 5G
Home Internet offering, a fixed wireless solution currently being
used in more than 5 million households and businesses nationwide
using fallow network capacity over the Un-carrier’s 5G network, and
the company’s previously announced fiber partnerships. This
expanded portfolio of offerings will help meet continually
increasing consumer demand for higher speed and reliable broadband
products.
"We could not be prouder to expand our strategic partnership
with KKR and form a new one with T-Mobile — two global leaders in
5G wireless connectivity and digital infrastructure," said Metronet
CEO Dave Heimbach. "Metronet’s 100% fiber network delivers
symmetrical multi-gigabit internet service directly to homes and
businesses, perfectly complementing T-Mobile’s industry-leading 5G
mobile and fixed-wireless offerings to meet consumer demand for
seamless, ubiquitous connectivity. With this new partnership,
Metronet will expand its fiber network faster and farther, reaching
millions more households by the end of the decade."
KKR is making the investment in Metronet through its global
infrastructure strategy. The firm first established its global
infrastructure strategy in 2008 and has since been one of the most
active infrastructure investors around the world, currently
managing over $61 billion in infrastructure assets. KKR has
significant experience investing in the growth of leading FTTH
providers globally with over 25 million homes passed and building
more than four million annually. This includes the creation of
independent open access wholesale fiber optic network companies in
Chile, Colombia, Peru and in the Netherlands and investments in
Hyperoptic in the U.K., Telenor Fiber in Norway and Deutsche
Glasfaser in Germany. Most recently, KKR announced the closing of
its acquisition of Telecom Italia Netco, which owns and operates
the entire national copper and fiber fixed line network in
Italy.
The transaction is expected to close in 2025, subject to
customary closing conditions and regulatory approvals. At closing,
T-Mobile is expected to invest approximately $4.9 billion to
acquire a 50% equity stake in the JV and 100% of Metronet’s
residential fiber retail operations and customers, as well as
funding of the JV.
Cautionary Statement Regarding Forward-Looking
Statements
This communication contains certain forward-looking statements
concerning T-Mobile and the proposed transaction with KKR to
acquire Metronet’s broadband infrastructure. All statements other
than statements of fact, including information concerning future
results, are forward-looking statements. These forward-looking
statements are generally identified by the words “plan,”
“anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,”
“could” or similar expressions. Such forward-looking statements
include, but are not limited to, statements about the benefits of
the proposed transaction, including anticipated future financial
and operating results, T-Mobile’s and the joint venture’s
objectives, expectations and intentions, expectations regarding the
JV being self-funding and future contributions (or lack thereof),
the expected number of homes passed by the JV in the future and the
expected timing of completion of the proposed transaction. There
are several factors which could cause actual plans and results to
differ materially from those expressed or implied in
forward-looking statements. Such factors include, but are not
limited to, the failure to satisfy any of the conditions to the
proposed transaction on a timely basis or at all; the occurrence of
events that may give rise to a right of one or both of the parties
to terminate the definitive agreements; adverse effects on the
market price of T-Mobile’s common stock and on T-Mobile’s operating
results because of a failure to complete the proposed transaction
in the anticipated timeframe or at all; negative effects of the
pendency or consummation of the proposed transaction on the market
price of T-Mobile’s common stock and on T-Mobile’s operating
results; the risk of litigation or regulatory actions; the
possibility that T-Mobile may not fully realize the projected
benefits of the proposed transaction within expected timeframes or
at all; business disruption during the pendency of or following the
proposed transaction; diversion of management time from ongoing
business operations due to the proposed transaction; the risk of
any unexpected costs or expenses resulting from the proposed
transaction; the risk that the proposed transaction and its
announcement or T-Mobile’s fiber strategy generally could have an
adverse effect on the ability of T-Mobile or Metronet to retain
customers and retain and hire key personnel and maintain
relationships with customers, suppliers, employees, stockholders
and other business relationships and on its operating results and
business generally; and other risks and uncertainties detailed in
T-Mobile’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2023, including in the sections thereof captioned
“Risk Factors” and “Cautionary Statement Regarding Forward-Looking
Statements,” as well as in its subsequent reports on Form 8-K and
Form 10-Q, all of which are filed with the SEC and available at
www.sec.gov and www.t-mobile.com. Forward-looking statements are
based on current expectations and assumptions, which are subject to
risks and uncertainties that may cause actual results to differ
materially from those expressed in or implied by such
forward-looking statements. Given these risks and uncertainties,
persons reading this communication are cautioned not to place undue
reliance on such forward-looking statements. T-Mobile assumes no
obligation to update or revise the information contained in this
communication (whether as a result of new information, future
events or otherwise), except as required by applicable law.
References to our and the SEC’s website are inactive textual
references only. Information contained on our and the SEC’s website
is not incorporated by reference in this communication and should
not be considered to be a part of this communication.
Advisors
Citigroup Global Markets Inc. is serving as T-Mobile’s financial
advisor on the transaction with Wachtell, Lipton, Rosen & Katz
and Davis Wright Tremaine serving as T-Mobile’s legal counsel.
Cleary Gottlieb Steen & Hamilton LLP, DLA Piper LLP and Milbank
LLP are serving as T-Mobile’s regulatory counsel.
Barclays and Morgan Stanley Morgan Stanley & Co. LLC are
serving as lead financial advisors to KKR, with Goldman Sachs,
Mizuho and MUFG also serving as financial advisors. Simpson Thacher
is serving as KKR’s legal advisor.
Bank Street Group LLC and TD Securities served as financial
advisors to Metronet. Paul, Weiss, Rifkind, Wharton & Garrison
LLP and Polsinelli served as legal counsel to Metronet. Lazard
served as financial advisor to Oak Hill Capital.
About T-Mobile
T-Mobile US, Inc. (NASDAQ: TMUS) is America’s supercharged
Un-carrier, delivering an advanced 4G LTE and transformative
nationwide 5G network that will offer reliable connectivity for
all. T-Mobile’s customers benefit from its unmatched combination of
value and quality, unwavering obsession with offering them the best
possible service experience and undisputable drive for disruption
that creates competition and innovation in wireless and beyond.
Based in Bellevue, Wash., T-Mobile provides services through its
subsidiaries and operates its flagship brands, T-Mobile, Metro by
T-Mobile and Mint Mobile. For more information please visit:
https://www.t-mobile.com
About KKR
KKR is a leading global investment firm that offers alternative
asset management as well as capital markets and insurance
solutions. KKR aims to generate attractive investment returns by
following a patient and disciplined investment approach, employing
world-class people, and supporting growth in its portfolio
companies and communities. KKR sponsors investment funds that
invest in private equity, credit and real assets and has strategic
partners that manage hedge funds. KKR’s insurance subsidiaries
offer retirement, life and reinsurance products under the
management of Global Atlantic Financial Group. References to KKR’s
investments may include the activities of its sponsored funds and
insurance subsidiaries. For additional information about KKR &
Co. Inc. (NYSE: KKR), please visit KKRs website at www.kkr.com. For
additional information about Global Atlantic Financial Group,
please visit Global Atlantic Group’s website at
www.globalatlantic.com.
About Metronet
Metronet is PCMag's “Fastest Major ISP” for 2023 and 2024,
providing multi-gigabit internet service to homes and businesses in
cities like Colorado Springs, Des Moines, Indianapolis, Lexington,
Norfolk, Tallahassee and more than 300 other communities across 17
states. Expanding its fiber-optic network in more than 90
communities at any one time, Metronet has become the country's
largest and fastest-growing privately owned fiber-to-the-home
company. More information on the Evansville, Ind.-based company can
be found at metronet.com.
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T-Mobile US, Inc. Media Relations
MediaRelations@t-mobile.com
T-Mobile Investor Relations Contact
investor.relations@t-mobile.com https://investor.t-mobile.com
KKR Media Relations Media@KKR.com
Metronet Media Relations media@metronet.com
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