BY Fraser Tennant
In a deal designed to scale and accelerate the deployment of next-generation broadband services throughout the US, Verizon Communications Inc. has announced it has signed an agreement to acquire Straight Path Communications Inc., a holder of millimeter wave spectrum configured for 5G wireless services.
The definitive agreement will see Verizon purchase Straight Path for $184 per share, or a total consideration of $3.1bn, in an all-stock transaction. The deal has been approved by the boards of directors of both Straight Path and Verizon.
Concurrently, Verizon is to pay (on behalf of Straight Path) a termination fee of $38m to the US multinational telecommunications conglomerate AT&T. Announced in April 2017, the previous definitive agreement between AT&T and Straight Path was cancelled after the Straight Path board of directors determined, following consultation with its financial advisers and outside legal advisers, that the transaction with Verizon constituted a superior proposal.
Based in Virginia, US, Straight Path holds millimeter wave spectrum licences configured for 5G services, including 39 GHz licences that serve the entire country and 28 GHz assets in major markets. A proposed telecom standard that will succeed the current 4G standards, 5G is expected to provide wireless internet speeds 40 times faster than at present.
Once complete, Verizon’s acquisition of Straight Path will give the wireless giant a significant nationwide portfolio of millimeter-wave spectrum, which is viewed as being particularly important for the deployment of the next generation of wireless services.
"Verizon now has all of the pieces in place to quickly accelerate the deployment of 5G," said Hans Vestberg, executive vice president and president of global network and technology at Verizon. "Combined with our recent transactions with Corning Incorporated, XO Communications, and Prysmian Group, this is another step to build the next-generation network for our customers."
Acting as legal counsel to Verizon in connection with the transaction is Debevoise & Plimpton LLP. For Straight Path, Evercore served as exclusive financial adviser while Weil, Gotshal & Manges LLP served as company counsel.
The Verizon/Straight Path transaction is anticipated to close within nine months and is subject to review by the Federal Communication Commission (FCC).
News: Verizon beats AT&T to buy spectrum holder Straight Path