Uniti says Hunt Telecom, Southern Light deals will provide sales, capex synergies

Uniti Fiber network (Uniti Group)
The acquisitions of Southern Light and Hunt will increase Uniti’s scale with about $250 million in new annual revenue.

Uniti may be in the process of completing its acquisitions of Hunt Telecom and Southern Light, but the service provider said it is already seeing a number of sales and capital synergies as it begins integrating these companies into its fold.

Mark Wallace, CFO of Uniti, told investors during the 45th Annual J.P. Morgan Global Technology, Media and Telecom Conference that Southern Light provides the company with further fiber and services scale in several adjacent markets.

“Buying Southern Light was very strategic in the fact that that network interconnects our entire Southeast region along the Gulf Coast,” Wallace said. “That’s going to allow us to get a lot of capex savings and revenue synergies as well.”

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Even before any synergies are realized, the acquisitions of Southern Light and Hunt will increase Uniti’s scale with about $250 million in new annual revenue. Additionally, the company expects $12.5 million in opex synergies to be achieved over the next 18-24 months.

Jim Volk, VP of finance and investor relations, said that while it’s early into the integration process, the service provider has identified $5 million in capital expenditure synergies.

“Hunt was putting fiber in the ground for a school district, which overlaps with fiber we were building for a wireless company,” Volk said. “It is going to allow us on a combined basis to save a couple of million dollars in capex.”

Similarly, Uniti is facing a similar situation for a fiber build it was conducting in Mississippi.

“On the Southern Light side, we realized there was a contract we had with a power company in Mississippi that we were building where there’s about 100 additional miles that we don’t have to build because Southern Light provides a big chunk of that,” Volk said. “We’re only a few weeks into the integration planning and as the deals close, I expect to see more of that.”  

But even before it completes these deals, Uniti is looking to pivot the excess fiber capacity it has deployed in existing markets to target new business services opportunities.

For its dark fiber builds, the Uniti Fiber unit currently deploys 144-288 count to each customer who may only use 12-18 strands.

“We have 90% excess capacity,” Volk said. “The next evolution for Uniti Fiber is to sell that excess capacity to local businesses and schools we’re passing by.”