Honolulu, Hawaii – Global private equity firm The Carlyle Group today announced it has signed a definitive agreement to purchase Verizon Hawaii from Verizon Communications, Inc. for $1.65 billion. The transaction includes Verizon’s Hawaii-based local telephone operations as well as the print directory, long distance and Internet service provider operations; Verizon Wireless is not included in the transaction. The business reported 707,000 switched wireline access lines, and reported sales of $610 million in 2003. The agreement is subject to regulatory approval. Carlyle Managing Director, William E. Kennard, said, “We are excited about the opportunity to serve the people of Hawaii as the new owners of Hawaii’s telephone company. In short order we will offer new services to our customers, including expanded broadband, and we expect to add many new jobs after the acquisition. Importantly, rates will stay the same as we reposition the business as a true local company befitting its local heritage – locally branded, locally managed and locally operated. Further, we plan to have strong local representation on the company’s Board of Directors and senior management team.” “Verizon’s agreement with The Carlyle Group complements our respective strategies, providing a fair value for these businesses as Verizon continues to focus assets in strategic markets,” said Lawrence T. Babbio, Jr., Verizon vice chairman and president of Domestic Telecom. “The agreement also provides for the fair and equitable treatment of Verizon employees in Hawaii, who have performed outstanding work for our customers and who will continue to be dedicated stewards for customer service in the future.” Carlyle Managing Director and head of the Global Media & Telecom Group, James A. Attwood, Jr., said, “We have been very impressed by the experience and dedication of the Verizon Hawaii employees, and we look forward to working with the IBEW. We intend to offer continued employment opportunities for the company’s employees, and to provide benefits comparable to those currently received. The company will of course honor the existing collective bargaining agreement.” A Local Company Again All major functions of the new company will eventually be located in Hawaii and staffed with local employees, including the headquarters, network and IT operations center and other back office functions, existing call center operations, and staff support functions currently provided on the mainland by Verizon. Carlyle plans to invest significant capital to transition the company to an independent local company in a manner that maintains service quality and is seamless to customers. Carlyle Telecommunications Experience Carlyle has a track record of successful telecommunications investments, deep knowledge of the local telephony business, and deep understanding of the complex regulatory issues affecting the industry. Further, Carlyle executives involved in this investment have exceptional experience in the telecommunications sector: - James A. Attwood, Jr. – former Executive Vice President of Verizon and GTE
- William E. Kennard – immediate past Chairman of the Federal Communications Commission
- Daniel F. Akerson – former CEO and Chairman of XO Communications, former CEO and Chairman of Nextel Communications, and former Chief Operating Officer of MCI
- William E. Conway, Jr. – Carlyle founder, former CFO of MCI and current Chairman of Nextel Communications
Select Carlyle Global Telecommunications & Media Investments - Casema BV – Dutch cable TV provider
- Dex Media, Inc. – U.S. directories provider
- eAccess, Ltd. – Japan-based broadband access provider
- Taiwan Broadband Communications – Taiwanese cable TV provider
- WCI Cable, Inc. – Alaskan submarine telecommunications cable company
Carlyle was advised in this transaction by Goldman, Sachs & Co. and Lehman Brothers Inc. # # # |
