Uniti Group (UNIT) TD Cowen 10th Annual Communications Infrastructure Summit summary

Strategic initiatives, merger rationale, and valuation catalysts

• Uniti and Windstream are merging to form a leading fiber provider with ~$4B in revenue and 236,000 fiber route miles across 47 states, aiming to accelerate growth, improve competitiveness, and unlock synergies, especially in Tier II and III markets.

• Execution at both fiber and Kinetic businesses, market education, and addressing technical pressures are key to unlocking higher valuations and driving strategic value.

• The combined company will operate as a taxable C corporation, headquartered in Little Rock, Arkansas, led by Uniti’s management and a 9-person board, with Uniti shareholders owning ~62% and Windstream shareholders ~38%.

• Post-transaction, focus will be on integration, synergy realization, and leveraging industry convergence and hyperscaler demand.

• Uniti will suspend its common dividend post-merger, with potential reinstatement in the future.

Financial profile and growth outlook

• Combined 2023 revenue was ~$2B with adjusted EBITDA of $916M, showing a 5% year-over-year increase, and revenue CAGR projected at 2.1% and adjusted EBITDA CAGR at 4.0% through 2028.

• The business plan is fully funded, with free cash flow positivity expected by end of 2026 and net leverage improving from 4.8x in 2023 to ~4.5x by 2028.

• Recent industry transactions support the combined company’s intrinsic value, with fiber-related EBITDA multiples ranging from 8.0x to 12.0x.

• Strategic fiber revenue is projected to grow 4–6% year-over-year in 2024, with Q2 2024 seeing the highest consolidated new sales bookings since Q4 2022, driven by hyperscalers and AI demand.

• Lease-up strategy and metro market expansion are key for recurring revenue growth.

Operational and integration priorities

• Pre-close priorities include executing operationally, unifying investor messaging, refining capital structure, and developing integration plans.

• Focus on expanding FTTH build plans, reviewing the new asset portfolio, and leveraging complementary networks and in-sourced construction teams for accelerated growth.

• Targeted annual opex synergies of up to $100M and capex synergies of $20–30M.

• Strategic capital allocation includes M&A, non-core asset sales, and further FTTH expansion.

• Managed services are non-core and may be divested to focus on fiber infrastructure and Kinetic synergies.