Verizon sells local operations to Frontier

The Tampa Bay region's relationship with Verizon is coming to an end after Verizon Communications Inc. agreed to sell its wireline operations in Florida, Texas and California to Frontier Communications Corp.

The $10.5 billion sale includes $9.9 billion in cash, and $600 million in assumed debt. It involves 3.7 million voice connections, 2.2 million high-speed data customers, 1.6 million FiOS Internet customers, and 1.2 million FiOS video customers, as well as 11,000 employees.

What it doesn't include, according to Verizon's filings with the U.S. Securities and Exchange Commission, is Verizon Wireless or Verizon Enterprise Solutions.

“These properties align with Frontier's disciplined strategic focus, and enhance our footprint with rich fiber-based assets,” said Maggie Wilderotter, Frontier's chair and CEO, in a release. “Frontier has a solid track record of successful integrations, and we welcome the new employees who will help us implement our local engagement model in these markets.”

Frontier, which trades on the Nasdaq under the symbol FTR, employs 17,000 people in 28 states, focused primarily in more rural areas. The transaction will nearly double the existing size of the Stamford, Conn.-based company, according to its SEC filing. It will finance the purchase through a combination of equity and equity-linked securities, as well as bridge financing from J.P. Morgan, Bank of America, Merrill Lynch and Citibank.

Verizon has been a major telecommunications player in Florida since Bell Atlantic Corp.'s merger with GTE created the new company in 2000. As the consumer market shifted toward wireless and cable bundled packages, Verizon took that direction as well, launching its FiOS fiber-optic cable service in 2005.

The service competed primarily with Bright House Networks in the northern part of Tampa Bay, and Comcast's Xfinity service in Sarasota and Bradenton.

Verizon, which trades on both the New York Stock Exchange and Nasdaq under the symbol VZ, also agreed to lease the right to more than 11,300 of its company-owned wireless towers to American Tower Corp., and selling 165 more, for a total of $5 billion. Verizon then plans to offer $5 billion to shareholders as part of an accelerated share repurchase program.

Verizon and Frontier are now seeking regulator approval for the purchase, and expect to close the transaction this time next year.