$1.65 billion buys Hawaiian wireline business

Verizon Communications announced last Friday an agreement to sell its wireline-related businesses in Hawaii to The Carlyle Group for $1.65 billion in cash.

Verizon Communications announced last Friday an agreement to sell its wireline-related businesses in Hawaii to private equity firm The Carlyle Group for $1.65 billion in cash.

The transaction includes the equity of Verizon Hawaii, which operates 707,000 switched wireline access lines, as well as the services and assets of Verizon Long Distance, Verizon Online and Verizon Information Services (directory publishing) in Hawaii. In 2003, these businesses had sales of $610 million, operating income of $58 million and depreciation expense of $111 million.

The Verizon Wireless operations and assets in Hawaii are not included in the sale. Verizon will also retain two units in the state that provide services for federal government customers, Verizon Federal Network Systems and Verizon Federal.

Approximately 1,700 Verizon Hawaii company employees will remain employees and are included in the transaction.

The closing of the transaction, expected in 2005, depends on approvals from the Hawaii Public Utilities Commission, the Federal Communications Commission and the US Department of Justice.