Funds managed by affiliates of Apollo Global Management Inc. (NYSE: APO) have entered into a definite agreement with Lumen Technologies (NYSE: LUMN) to acquire its incumbent local exchange carrier business, including its consumer, small business, wholesale and mostly copper-served enterprise customers and assets, in 20 states for $7.5 billion, including debt assumption of approximately $1.4 billion, and subject to working capital and various other purchase price adjustments.
“This transaction is an important step in our continued efforts to transform Lumen and drive future growth for our company,” said Jeff Storey, Lumen president and CEO. “We are pleased with the attractive valuation we received for these assets, which highlights the overall value of Lumen’s extensive asset portfolio. Apollo Funds will receive a great business with a strong customer base, dedicated employees, and a platform for future growth.”
“The team at Lumen has built a great business and we see an incredible opportunity to provide leading edge, fiber-to-the-home broadband technology to millions of its business and residential customers,” said Aaron Sobel, private equity partner at Apollo. “Our investment will help accelerate the upgrade to fiber optic technologies, and we are excited to have such a high-caliber management team ready to bring faster and more reliable internet service to many rural markets traditionally underserved by broadband providers.”
Citi, Goldman Sachs, Bank of America, and Morgan Stanley served as financial advisors to Lumen in the transaction and Jones Walker served as legal counsel. Advisors to the Apollo Funds include Mizuho, LionTree, Barclays and Credit Suisse as financial advisors; Altman Solon as telecommunications, media and technology consultant; and Paul, Weiss, Rifkind, Wharton & Garrison LLP as lead legal counsel, together with Jenner & Block LLP and Morgan Lewis & Bockius LLP as regulatory counsel.