T-Mobile (TMUS) and investment firm EQT announced Thursday they have entered into a joint venture (JV) with EQT\'s Infrastructure VI fund (EQT) that will acquire fiber-to-the-home platform Lumos from EQT\'s predecessor fund EQT Infrastructure III.
The JV will bring T-Mobile\'s retail, marketing, brand and customer experience strengths together with EQT\'s fiber infrastructure investment expertise.
Together they will acquire Lumos\' scalable fiber network build capabilities to deliver best-in-class high-speed fiber internet connectivity to customers across the U.S.
After the transaction closes, Lumos will transition to a wholesale model with T-Mobile as the anchor tenant owning customer relationships and leveraging its brand to attract new subscribers. Lumos which currently reaches 320,000 households over 7,500 route miles with fiber optic internet and home wi-fi service in the Mid-Atlantic.
The JV will focus on market identification and selection, network engineering and design, network deployment, and customer installation.
The transaction is expected to close in late 2024 or early 2025, subject to customary closing conditions and regulatory approvals.
At closing, T-Mobile is expected to invest approximately $950 million in the JV to acquire a 50% equity stake and all existing fiber customers, with the funds invested by T-Mobile being used by Lumos for future fiber builds.
The next capital contribution by T-Mobile out of an additional commitment of approximately $500 million is anticipated between 2027 and 2028.
These combined investments are expected to allow Lumos to reach 3.5 million homes passed by the end of 2028. T-Mobile continues to expect to complete its remaining authorization for share repurchases and dividends in 2024.
With this transaction, EQT Infrastructure VI is expected to be 35-40% percent invested based on target fund size and subject to customary regulatory approvals.