Telephone and Data Systems, Inc. (NYSE:TDS) shares are trading higher after the company announced a definitive deal to sell its wholly owned subsidiaries OneNeck IT Solutions and OneNeck Data Center Holdings to US Signal Company for an undisclosed amount.
US Signal, a portfolio company of Igneo Infrastructure Partners, is acquiring all of OneNeck's operations, encompassing its data centers, cloud hosting, and solutions provider services.
Vicki L. Villacrez, TDS Executive Vice President and CFO, said, "As part of our capital allocation process, we are prioritizing assets to determine what is strategic and can improve our competitiveness."
"The sale of OneNeck provides additional capital that can be used to support TDS Telecom's fiber program, which includes investing in communities throughout the US with quality broadband connectivity. I believe that OneNeck's business complements US Signal and I am excited about future opportunities for both associates and the operations."
The transaction is expected to close in the third quarter of 2024, pending the satisfaction of customary closing conditions.
Michael Ryder, US Signal board chair and co-head of Igneo in North America, stated, "This acquisition is an important step toward fulfilling the company's expansion plans in the U.S. middle market."
Investors can gain exposure to the stock via SPDR S&P Telecom ETF (NYSE:XTL) and Invesco S&P SmallCap Utilities & Communication Services ETF (NASDAQ:PSCU).
Price Action: TDS shares are up 12.9% at $22.46 at the last check Monday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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