It was announced today that Alaska Communications is in the process of selling its wireless assets and 33 percent of its interest in the Alaska Wireless Network to GCI for $300 million. The Alaska Wireless Network was a joint agreement to provide the infrastructure so that ACS and GCI could combine their services. It was approved by the FCC last year. Now the network will be fully owned by GCI.
If the deal goes through, the transfer will happen next year and the services of the roughly 109,000 ACS mobile users will be uninterrupted.
Heather Cavanaugh, the director of corporate communications for ACS, said that wireless services accounted for about a third of ACS’s business. She said that the $300 million will allow the company to pay down debt, from $415 million to about $165 million, to focus on broadband information technology services, like telemedicine and distance learning for schools, which it had already begun to do. Recently, ACS received a part of a contract from the state to provide broadband.
ACS, currently with roughly 850 employees, will be the largest company to focus exclusively on broadband technology in the state.
It seems like a smart, if not a last-gasp move. The company was once a dominant player in the cell business in Alaska. Then, in 2003, Liane Pelletier took the reins at ACS. It’s said that she over-inflated the value of the stock by guaranteeing high dividends, instead of reinvesting in the company. It made ACS’s private-equity owners temporarily happy, but she left the company with an unsustainable business model which they’ve struggled with since.
While ACS was struggling, GCI began to move heavily into wireless in 2008.
Wall Street reacted slightly to the news. ACS’s stock opened at $1.25, where it’s been hovering for about a month. After-hours trading brought it up to $1.73, from a five-year high of $11.51.
GCI’s stock opened at $12.26. After-hours trading brought it to $12.42.