Shentel is acquiring Horizon Telecom in a deal that will enhance its commercial fiber business and serve as a new ramp for its Glo Fiber fiber-to-the-home (FTTH) broadband program.
The company entered into a definitive agreement to acquire 100% of the equity interests in Horizon Acquisition Parent LLC for $385 million. Consideration will consist of $305 million in cash and $80 million of Shentel common stock.
Shentel is gaining access to a company that has already gained a presence with businesses and consumers in markets often overlooked by larger providers.
Based in Chillicothe, Ohio, Horizon was founded in 1895 as the ILEC in Ross County, Ohio and rapidly expanded its fiber network over the past 14 years. Most recently, Horizon has pursued a strategy of investing in FTTH in Ohio's Tier 3 and Tier 4 markets. Currently, it passes 14,000 homes and businesses with fiber in its ILEC market and 18,000 homes in new, greenfield markets adjacent to its commercial fiber network.
Christopher French, President and CEO of Shentel, said that when it completes the Horizon acquisition, it expects to pass 150,000 additional homes with fiber in greenfield markets, targeting 600,000 total passings by the end of 2026.
“The acquisition of Horizon is a transformative transaction that we believe will allow us to accelerate our Fiber First strategy by doubling the size of our commercial fiber business and creating a new beachhead for our Glo Fiber business,” he said. “We are excited to combine Horizon’s robust fiber network and commercial fiber business with our 9,000 route-mile, multi-state fiber network and accelerate our Glo Fiber expansion.”
All about expansion
The critical piece of the Horizon acquisition is that it allows Shentel to expand its commercial and residential Glo Fiber businesses immediately.
Additionally, the acquisition gives Shentel an immediate presence in Ohio and enhances its overall reach. Before the purchase, Shentel offered services in Virginia, West Virginia, Maryland, Pennsylvania, Delaware and Kentucky.
“The Horizon acquisition will allow us to increase the size of our overall business by about 25% across most key metrics,” French said. “We identified about $10 million in annual run rate synergy savings that we anticipate realizing in 18 months following closing and integration.”
Another critical piece of the acquisition is Horizon’s middle-mile network.
“We believe owning the middle mile fiber network that connects our Glo Fiber network creates cost and reliability advantages over competitors with island networks,” French said. “We also believe that the best way to maximize the return on the investment of a high-capacity fiber network is to serve both residential and commercial customers.”
Contiguous super-regional network
Horizon has established a name for itself as one of the largest independent commercial fiber providers in Ohio and adjacent states, serving national wireless providers, carriers, enterprises, and government, education and healthcare customers. The service provider’s 7,200 route-mile fiber network is the largest and most dense network across its footprint, with over 9,000 on-net locations. Approximately 64% of Horizon’s revenues are derived from their commercial customers.
By making a minor investment, Shentel will connect its network and Horizon’s network to create what French said is a “super-regional network that connects nine states.”
From a commercial business perspective, the combined 16,000 fiber mile network will provide on-net connections in critical data centers in Ashburn, VA and Chicago and many unique routes in rural Ohio, Virginia and West Virginia. “We expect this acquisition to build the commercial fiber business at a faster pace than the individual companies could on a standalone basis,” French said.
Horizon has also been active on the broadband grant front, securing funds to enhance its last-mile consumer and middle-mile networks.
The provider has been awarded over $57 million in grants from the Ohio Broadband Authority and NTIA to construct fiber to 2,500 unserved homes, expand its middle-mile fiber network across eight underserved counties in Ohio, and increase its network backbone capacity to 400 Gbps. These projects are expected to be completed by 2028.
“We expect this grant and our co-investment to further our network competitive advantage, especially in the wireless and carrier customer verticals,” French said. “
This funding also has implications for Shentel’s Glo Fiber residential business. “We identified 100,000 new passings that met our underwriting criteria to construct by 2026,” French said. “The residential opportunity could increase beyond 2026 with smaller markets that network passes and unserved homes that are not in our business plan today.”
Further, Shentel could also take advantage of BEAD funding. The NTIA has awarded Ohio $800 million to build broadband services to unserved homes throughout the state. “We will closely monitor this program as application and award processes develop,” French said.