Core Viewpoint - Lumen Technologies, Inc. has entered into a definitive agreement to sell its Mass Markets fiber-to-the-home business, including Quantum Fiber, to AT&T for 5.75billionincash,markingasignificantstepinLumen′stransformationintoadigitalenterprisenetworkingcompany[1]Group1:TransactionDetails−Thetransactionisexpectedtocloseinthefirsthalfof2026,pendingregulatoryapprovalsandcustomaryclosingconditions[2]−Thesaleincludesapproximately95750 million in annualized revenues [3] Group 2: Financial Implications - Net proceeds from the deal, estimated at approximately 4.2billion,willbeusedtoretireabout4.8 billion in super priority debt, reducing annual interest expenses by 300millionandloweringtheprojected2025netdebttoadjustedEBITDAratiofrom4.9to3.9[4]−ThedealwillalsodecreaseannualcapitalexpendituresrelatedtoMassMarketsfiberbyabout1 billion, allowing Lumen to reinvest in enterprise offerings and strengthen its balance sheet [4] Group 3: Future Strategy - Lumen plans to continue new fiber buildouts at a similar pace as in 2024 through the end of 2025 while retaining its existing copper network for consumer customers [5] - The company aims to expand its intercity fiber network to 47 million miles by 2028 and focus on growing the Lumen Digital Platform to provide enhanced networking solutions for business customers [6] - Management emphasized that the transaction enhances financial flexibility to innovate enterprise networking in a multi-cloud, AI-first environment, retaining core infrastructure assets for enterprise services [7] Group 4: Market Demand and Partnerships - Increasing demand for Lumen's Private Connectivity Fabric (PCF) solutions is noted, with $8.5 billion in PCF deals secured in 2024, driven by the urgent need for fiber capacity among large companies [8] - Lumen has established partnerships with major tech firms like Microsoft, Amazon, Google Cloud, and Meta Platforms to support AI innovation through enhanced network capabilities [8]
Lumen(LUMN) ZACKS·2025-05-22 14:15