Uniti shareholders approve merger with Windstream affiliate

LITTLE ROCK, Ark. - Uniti Group Inc. (NASDAQ:UNIT), a real estate investment trust specializing in communications infrastructure with a market capitalization of $1.28 billion and annual revenue of $1.17 billion, announced today that its stockholders have overwhelmingly approved a merger with an affiliate of Windstream Holdings II, LLC. The approval was secured during a special meeting where more than 90% of the present and represented Uniti common stock shareholders voted in favor of the merger. According to InvestingPro analysis, Uniti currently maintains a FAIR financial health score, suggesting stable operational performance.

The transaction, which is expected to close in the second half of 2025, will result in Uniti becoming an indirect, wholly owned subsidiary of Windstream Parent, Inc. Following the merger, Windstream Parent, Inc. is set to be renamed Uniti Group Inc. and its common stock will be listed on the Nasdaq Global Market under the ticker symbol UNIT.

According to the terms of the definitive merger agreement, Uniti stockholders will receive approximately 62% of the outstanding common stock of the combined company. Windstream shareholders are to be compensated with $425 million in cash, $575 million in preferred stock, and around 38% of the outstanding common stock of the new entity. They will also receive non-voting warrants to acquire up to an additional 6.9% of common stock. The company currently trades at attractive valuation multiples, with a P/E ratio of 13.8 and an EV/EBITDA of 7.9, as reported by InvestingPro.

Uniti specializes in the acquisition and construction of mission-critical communications infrastructure, including fiber and wireless solutions. As of December 31, 2024, the company owns approximately 145,000 fiber route miles and 8.8 million fiber strand miles, along with other communications real estate throughout the United States.

The merger is subject to customary closing conditions, including regulatory approvals. The final voting results from the special meeting will be disclosed in a Form 8-K filed with the U.S. Securities and Exchange Commission on April 2, 2025.

This strategic move is anticipated to enhance the combined company’s operations, revenue, cash flow, and growth potential, as stated in forward-looking remarks from management. The company currently offers an attractive dividend yield of 11.5%, and InvestingPro analysis indicates net income is expected to grow this year. However, these expectations are based on current projections and are subject to risks and uncertainties that could cause actual outcomes to differ materially. For deeper insights into Uniti’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.

The information for this report is based on a press release statement from Uniti Group Inc.

In other recent news, Uniti Group reported its fourth-quarter 2024 earnings, showing a slight miss in both earnings per share (EPS) and revenue forecasts. The company announced an EPS of $0.09, just below the expected $0.10, while revenue came in at $293.32 million, slightly under the $295.12 million forecast. Despite these minor misses, Uniti Group’s strategic focus on fiber infrastructure and its upcoming merger with Windstream are seen as pivotal for future growth. The merger with Windstream is expected to be finalized within the next four to five months, which has contributed to positive investor sentiment. Additionally, Raymond James recently upgraded Uniti Group’s stock rating from Outperform to Strong Buy, reflecting optimism about the company’s long-term prospects in the Fiber-to-the-Home (FTTH) market. Analyst Frank Louthan expressed confidence in Uniti’s potential to become a significant player in this space, drawing parallels to the success of Frontier Communications. Looking ahead, Uniti Group anticipates being free cash flow positive in 2025, with plans to accelerate its FTTH build-out. The company aims to construct approximately 325,000 homes in 2025, with initial fiber penetration rates expected to be between 25-30%.

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