CHICAGO - Telephone and Data Systems, Inc. (NYSE: TDS), a Fortune 1000 company, has entered into a definitive agreement to sell its subsidiaries OneNeck IT Solutions LLC and OneNeck Data Center Holdings LLC to US Signal Company, LLC. The transaction, which includes the transfer of data centers and cloud hosting along with solutions provider operations, is expected to conclude in the third quarter of 2024, pending customary closing conditions.
Vicki L. Villacrez, TDS Executive Vice President and CFO, stated that the divestiture aligns with the company's capital allocation strategy to focus on assets that enhance competitiveness. The proceeds from the sale are earmarked for general corporate purposes, with a significant portion supporting the expansion of TDS Telecom's fiber program across the United States.
Villacrez expressed confidence in the complementary nature of OneNeck's business with US Signal's operations and anticipated future growth opportunities for both entities.
OneNeck IT Solutions and OneNeck Data Center Holdings specialize in hybrid IT solutions, including cloud and hosting solutions, managed services, enterprise application management, and other advanced IT services. They operate high-tier data centers in several states and provide technology management for businesses nationwide.
US Signal, a portfolio company of Igneo Infrastructure Partners, is a leading provider of digital infrastructure services, including connectivity, cloud hosting, colocation, data protection, and disaster recovery, supported by its extensive fiber network.
TDS, which provides wireless, broadband, video and voice, and hosted and managed services through its businesses, including UScellular and TDS Telecom, was advised by TD Securities as its sole financial advisor on the transaction.
The announcement is based on a press release statement.
InvestingPro Insights
In light of Telephone and Data Systems, Inc.'s (NYSE: TDS) recent strategic divestiture, key metrics and insights from InvestingPro provide a clearer picture of the company's financial health and market performance. TDS has demonstrated a remarkable 202.57% year-over-year price total return, indicating a strong market confidence which may have contributed to the decision to streamline operations and sell OneNeck IT Solutions and OneNeck Data Center Holdings. Furthermore, the company's liquid assets surpassing short-term obligations, as noted in one of the InvestingPro Tips, suggests a robust financial position that supports TDS's capital allocation strategy mentioned by CFO Vicki L. Villacrez.
Despite not being profitable over the last twelve months, TDS has maintained its dividend payments for an impressive 51 consecutive years, with a current dividend yield of 0.8%. This commitment to shareholder returns, coupled with the company's significant share price appreciation over the last three months (30.61% price total return), could reassure investors about the company's potential for long-term value creation.
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