Windstream has announced the sale of Web 1.0-era consumer internet services business Earthlink to Dallas-based private equity firm Trive Capital for $330 million.
The deal comes less than two years after the Little Rock, Arkansas-based Windstream’s $1.1 billion all-stock purchase of Earthlink, the ISP founded back in 1994 as an alternative to America Online, Prodigy and CompuServe.
The legacy EarthLink consumer internet business offers internet access, online back-up, managed web design, web hosting and various email services to more than 600,000 customers throughout the U.S.
“This transaction enables us to divest a non-core segment and focus exclusively on our two largest business units. In addition, it improves our credit profile and metrics in 2019 and beyond,” said Tony Thomas, president and CEO of Windstream.
As RCR Wireless noted, when Windstream purchased Earthlink in February 1994, the telecom touted the combined network’s reach of 145,000 route-miles of fiber, Earthlink’s early launch of SD-WAN and expected annual cost synergies of $125 million.
Speaking to Bloomberg, however, Windstream spokesperson Chris King added, “People paid $5 to $10 a month for email. It was not a strategic asset for us.”
For Windstream, the divesture of Earthlink follows the $60.5 million sale of dark fiber assets in Minnesota and Nebraska to Minnesota-based telecom provider Arvig Enterprises last month.
“We are excited to partner with and support the EarthLink management team in continuing to provide great products and services available to millions of households in the United States,” said Trive Managing Partner, Conner Searcy. “We intend to provide additional resources and access to deep industry relationships to help grow the brand in the coming years.”