Macquarie Infrastructure Partners (MIP) is acquiring Bluebird Network, LLC, a telecommunications company operating in the Midwestern region of the USA. MIP is a long-term infrastructure investment fund managed by the Macquarie Infrastructure and Real Assets (MIRA) division of Macquarie Group.

Bluebird provides high bandwidth network solutions within rural and urban areas throughout the Midwest, focusing on connecting rural areas to major cities. Its network consists of approximately 178,000 fiber strand miles (~286,500km) across Missouri, Kansas, Illinois, and Oklahoma. The company provides a wide variety of network services to enterprise and carrier customers, including secure and reliable bandwidth, Metro Ethernet, Wide Area Network Ethernet, Dedicated Internet Access, E-Line Services, Ethernet Virtual Private LAN Service (E-LAN) and Mobile Backhaul Transport services.

MIP has partnered with Uniti Group Inc. to structure the transaction. Uniti has agreed to purchase the Bluebird fiber network for US$319 million and MIP has agreed to purchase the Bluebird operations for an undisclosed purchase price. In addition, Uniti has agreed to sell Uniti Fiber’s Midwest operations to MIP for approximately US$37 million. 

Concurrently with the closing of these transactions, Uniti will lease the Bluebird fiber network and its Midwest fiber network, on a combined basis, to MIP under a long-term triple net lease. The initial lease term will be 20 years with multiple renewal options at MIP’s discretion. Initial annual cash rent will be approximately US$20.3 million representing an initial cash yield of 9.6%.

As part of the transaction, Bluebird will also acquire Uniti’s Midwestern fiber business and receive a long-term lease over Uniti’s Midwestern fiber network, which consists of approximately 2,500 miles (~4,000km) of network predominantly in Illinois. Upon completion of the transactions the two adjacent networks will be combined and operated as one company under the Bluebird name.

The transaction is subject to regulatory approvals and other customary terms and conditions, and is expected to be closed by the end of the third quarter of 2019.

MVP Capital Advisors served as exclusive financial advisor to Bluebird on the transaction. Wells Fargo Securities, LLC acted as exclusive financial advisor to MIP and Uniti. Barclays provided committed financing to Uniti in connection with the transaction.