Hawaiian Telcom is merging with Cincinnati Bell, an Ohio-based communications company, in a cash and stock transaction valued at approximately $650 million.
Under the agreement, officials say both companies will continue to maintain their separate local brand identities and operations, while combining their buying power and resources to continue to focus on delivering world class integrated communications and technology solutions for their local communities.
Hawaiian Telcom will continue to be locally managed from Hawaii and its existing union labor agreements will be honored. No jobs should be affected.
Hawaiian Telcom will name two directors to the combined company board of directors. Officials say these seats will be held by Hawaii residents to ensure that Hawaii is well represented when broader strategic decisions are made.
“Cincinnati Bell realizes what local means and realizes they can’t manage Hawaii from Cincinnati, so they actually committed to keeping jobs in place in Hawaii,” said Scott Barber, Hawaiian Telcom president and CEO. “They’re going to have local management here. They’re going to keep the Hawaiian Telcom name and brand and equity, so there should be no impact on jobs.”
Hawaiian Telcom says, if anything, it will be able to roll out more services and keep costs down. Cincinnati Bell has promised to invest in Hawaiian Telcom’s Next-Generation Fiber network statewide, which will create additional opportunities for growth.
“Cloud migration, the need for fiber infrastructure that supports 5G-ready, high-density data transmission and IoT are the key trends that will define telecommunications in the future,” said Leigh Fox, president and CEO of Cincinnati Bell. “We are excited about the opportunity to partner with Hawaiian Telcom as part of Cincinnati Bell’s refined strategy to build two distinct businesses with the appropriate scale, structure and leadership to deliver superior operating results, while providing strategic optionality from a diversified but complementary portfolio of assets.”
The transaction is subject to certain customary closing conditions, including federal and state regulatory approvals and approval by Hawaiian Telcom’s stockholders. Once it’s complete, Hawaiian Telcom stockholders will own approximately 15 percent and Cincinnati Bell stockholders will own approximately 85 percent of the combined company.
The merger is expected to close in the second half of 2018.
“Hawaiian Telcom has been an engaged corporate citizen in Hawaii for generations,” U.S. Sen. Brian Schatz, D, Hawaii, said in a statement. “The hundreds of jobs it provides and the services it offers are vital to Hawaii’s local economy. As the lead Democrat on the Commerce Committee’s telecommunications subcommittee, I will carefully review the proposed merger and closely monitor its potential impact on local jobs as well as the telecommunications services it provides for Hawaii consumers.”
Cincinnati Bell was founded in 1873, and originally provided telegraph services. It currently serves customers in Ohio, Kentucky, and Indiana, and has 3,000 employees.
The company also announced Monday that it is buying OnX Enterprise Solutions, a technology services and solutions provider in North America and the United Kingdom, for $201 million.
Cincinnati Bell says both agreements are part of its strategy to focus on network communications and enterprise IT services.