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Uniti agrees to buy OPENetworks for A$27.5M

Uniti Group Ltd. agreed to acquire fiber operator OPENetworks Pty. Ltd. for A$27.5 million.

The Australian telecommunications services company, formerly Uniti Wireless Ltd., will partly pay the transaction in cash and partly in Uniti shares, with a minimum share consideration of A$8.8 million. Uniti may also increase the share consideration to about A$18 million, in place of cash, before the completion of the deal.

Uniti said that its agreement to acquire OPENetworks is "highly complementary" with its acquisition of LBN Co Pty. Ltd., a builder and wholesale operator of private fiber networks. OPENetworks has numerous retail service providers connected to its network, which supplies voice and high-speed data services to residential consumers.

Two major shareholders of OPENetworks committed to take a minimum of nearly one-third of the purchase consideration in Uniti shares. The same shareholders also pledged to maintain an ongoing involvement with Uniti's private fiber business.

Uniti estimates that OPENetworks will have a pro forma EBITDA of about A$2.5 million during the 2020 fiscal year, with an expectation to bring it above A$4 million during the fiscal year 2021, when a sizable number of the contracted ports pipeline become activated over the near term.

The deal is expected to close at the end of October, subject to customary conditions, including confirmatory due diligence.