Why the Uniti (ASX:UWL) share price is on watch today

The Uniti Group share price is on watch today following the company’s asset acquisition announcement. Here’s what you need to know.
The post Why the Uniti (ASX:UWL) share price is on watch today appeared first on The Motley Fool Australia. –

watch, watch list, observe, keep an eye on

The Uniti Group Ltd (ASX: UWL) share price remains in a temporary trading halt this morning. This follows the company’s announcement it has acquired select fibre-to-the-premises (FTTP) assets owned by Telstra Corporation Ltd (ASX: TLS). The Uniti share price was trading at $1.48 at market close yesterday.

What’s the deal?

In an ASX announcement this morning, Uniti revealed it has entered into a binding agreement to acquire Telstra’s FTTP assets, which provide high speed broadband to the Telstra Velocity estates and South Brisbane Exchange regions (Velocity).

The company said Telstra would become a retail service provider (RSP) of its FTTP business. Following on Uniti’s recent acquisition of OptiComm Ltd, this segment of the company has been rebranded as OptiComm.

The acquisition represents Australia’s second largest private FTTP network, with 65,000 connected premises of which 50,000 are active.

Uniti is paying $140 million for the assets, with $85 million payable upon completion. The acquisition will be funded via a combination of debt, underwritten equity placement and a share purchase plan.

The company forecasts the new assets will contribute $21 million in annual earnings before interest, tax, depreciation and amortisation (EBITDA), starting early January 2021.

What Uniti’s CEO had to say

Commenting on the Velocity acquisition, Uniti CEO Michael Simmons said:

To have secured such a large FTTP network aligned to our core strategy which can be integrated quickly to grow our ‘core plus’ infrastructure earnings is a wonderful way to end what has been a completely transformative year for Uniti Group.

The agreement struck with Telstra for it to become an RSP of our W&I business is perhaps the most significant strategic aspect of this transaction, given the large universe of presently untapped greenfield property opportunities it will enable us to target with Australia’s largest RSP as part of our FTTP offering and associated range of value added services, such as access control, CCTV and perimeter WIFI services.

Uniti share price and company snapshot

Uniti Group provides internet and telecommunication products and services. Formerly Uniti Wireless Limited, the company also focuses on the acquisition and construction of communications infrastructure such as fibre, wireless towers and ground leases. Uniti makes up part of the All Ordinaries Index (ASX: XAO).

After crashing 53% during the February and March COVID-19 market panic, the Uniti share price came charging back, up 90% from its 19 March lows.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of June 30th

More reading

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the Uniti (ASX:UWL) share price is on watch today appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!