nTelos (Nasdaq: NTLS) has decided that it's time to split up its wireless and wireline holdings by creating a separate, publicly traded company called "The New Wireline Company."
The service provider said that the deal would be structured as a tax free distribution of The New Wireline Company shares in Q2 2011. Both companies will be listed separately on the Nasdaq stock exchange.
"The motivation for separation really relates to how are these businesses going to be best positioned to grow in the future?" said nTelos CEO Jim Hyde during a Wednesday conference call, according to the Charleston Gazette. "This is a separate and grow initiative."
Over the past year, nTelos has been enhancing the reach of its wireline unit by acquiring a 2,200 fiber mile network from Allegheny Communications followed by its recently completed acquisition of FiberNet from One Communications.
Hyde said that splitting the units up into separate companies will enable each company to dedicate capital to projects that are core to their individual businesses. "Both of these businesses will be unencumbered to pursue their individual growth strategies," he said.
Following the completion of the split, there will be a "transition period" where Hyde will serve as the CEO of both the wireless company and oversee the new wireline business.
After the transition period ends, Frank L. Berry, current president of NTELOS wireline, will become chief operating officer of The New Wireline Company. The wireline business will include two traditional ILEC businesses and a CLEC unit that will offer competitive broadband data and wholesale services over an approximately 5,700 route-mile fiber network.
- see the release
- here's FierceWireless' take
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