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Cincinnati Bell Completes Acquisition of Hawaiian Telcom

Cincinnati Bell Inc. CBB recently announced that it has completed the acquisition of Hawaiian Telcom Holdco, Inc. HCOM. The financial terms of the deal remained undisclosed.  

Headquartered in Honolulu, Hawaiian Telcom is Hawai‘i’s fiber-centric technology leader and provides integrated communications, broadband, data center and entertainment solutions for business and residential customers.

The combined entity is likely to be a stronger communications and technology company. The strategic move will boost innovation and build scale and fiber density across Cincinnati Bell’s footprint, enabling the company to offer more competitive products and services, including continued expansion of Next Generation Fiber Network to customers across Hawai‘i.

The merger takes Cincinnati Bell a step forward toward expanding its portfolio of next-generation fiber offerings and securing fiber density value for customers and shareholders. It positions the company at the forefront of innovation in telecommunications and establishes a platform for future growth. Moreover, the transaction takes into account Hawaiian Telcom’s local knowledge and deep fiber infrastructure, including its direct access to the historic SEA-US Trans-Pacific fiber cable linking Asia to the United States. The expanded route diversity will provide the combined company more exposure to key markets where demand for global communications is steadily rising.  

From Cincinnati Bell’s viewpoint, the successful integration will boost its scale of operations as well as its strategy to create a diversified and balanced revenue mix by expanding its high-speed, high-bandwidth fiber optic network while building a complementary IT solutions and cloud services business. The buyout of Hawaiian Telcom will provide Cincinnati Bell with ample growth opportunities in its Entertainment and Communications business as it migrates customers from legacy services to advanced fiber offerings.

Per the deal, Hawaiian Telcom will keep its name and will be locally administered by John Komeiji, who will serve as the president and general manager of Hawaiian Telcom. Also, Cincinnati Bell has added two Hawaiian Telcom Board Members — Walter A. Dods, Jr. and Meredith J. Ching — to its board of directors.

Over the past three months, shares of Cincinnati Bell have rallied 12.2% against the industry’s decline of 11.2%.         

Cincinnati Bell currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the broader industry include Atmos Energy Corporation ATO and UGI Corporation UGI, both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.              

Atmos has a long-term earnings growth expectation of 7%. It surpassed earnings estimates thrice in the trailing four quarters with an average positive surprise of 8.8%.     

UGI has a long-term earnings growth expectation of 8%.

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