Frontier acquisition

Breaking News

• VZ has entered into a definitive agreement to acquire FYBR in an all cash deal valued at approximately $20bn.

• VZ is paying approximately 8.4x 2025E adj. EBITDA, prior to synergies of $0.5bn. Deal values FYBR at 8.4x 2025E EBITDA

  Verizon (VZ) and Frontier (FYBR) announced today the companies have entered into a definitive agreement for VZ to acquire FYBR in an all cash deal. The acquisition values FYBR at ~$20bn at the agreed $38.50 per share, a 43.7% premium to the 90-day volume weighted average price on September 3, 2024. The closing is expected in approximately 18 months, subject to FYBR shareholder approval and certain regulatory approvals. We estimate VZ is paying a multiple of 8.4x 2025E EBITDA and 7.8x 2026E, pre-synergies.

  No change to 2024 guide

  VZ reaffirmed its 2024 guidance with the announcement of the deal which is not expected to close until 4Q25E.

  Strategic rationale
  At BofA’s Media, Communications & Entertainment conference yesterday, VZ’s Consumer CEO spoke about Consumer segment, including VZ’s views on fiber and convergence. When fiber and mobility are sold together, VZ enjoys a 50% reduction in mobility churn and a 40% reduction in fiber churn. On the topic of convergence, VZ believes up to 40% of customers could eventually chose to bundle broadband and wireless. Unlike the European experience, VZ believes this will be largely consumer pull vs. regulatory push. Any bundle discounts that emerge are expected to remain rational and reflect the value proposition delivered to consumers.