GCI Acquires Quintillion in $310M Deal
Photo Credit: GCI
Three years after an Anchorage company trying to build a fiber optic cable from Asia to Europe via Alaska was bought by an out-of-state investment firm, Quintillion is back under Alaskan management. GCI is acquiring Quintillion’s holding company, Q Gateway Intermediate Holdings, as well as its 1,800 miles of subsea and terrestrial fiber and 1,500 miles of planned fiber expansion.
Unified Network Operations
Under terms of the transaction, GCI will acquire 100 percent of the equity in Quintillion at a $310 million enterprise value, subject to customary working-capital and other adjustments. GCI will reimburse up to $50 million of qualifying capital expenditures related to the Nome-to-Homer Express project. Additional consideration may be payable in 2028, 2029, and 2031 through a post-closing earnout dependent on achievement of certain financial metrics.
In 2023, Washington, DC-based private investment firm Grain Management acquired Quintillion’s parent corporate umbrella, QSH Parent Holdco, hoping to guide its plans for global broadband connections.
Founded in 2015, Quintillion constructed and operates a 1,200-mile subsea and 500-mile terrestrial fiber optic network in Northern Alaska. A planned three-phase subsea cable system would connect Asia to the American Pacific Northwest, and to Western Europe via the Northwest Passage and through the Alaska and Canadian Arctic.
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“Quintillion set out to build resilient, Arctic-ready fiber infrastructure in some of the most challenging operating environments in the world, and I’m incredibly proud of the network and business our team has built,” says Quintillion President Mac McHale. “GCI brings Alaska expertise, long-term commitment, and the operational scale needed to carry this network forward. We’re confident these assets will be in good hands.”
GCI, a telephone and internet provider founded in Anchorage, is now the property of GCI Holdings, a wholly owned subsidiary of GCI Liberty, a spin-off of Colorado-based Liberty Broadband Corporation. The spin-off maneuver last year enabled GCI Liberty to trade stock separately under the Nasdaq symbols GLIBA and GLIBK.
Quintillion’s hardware will be integrated with GCI’s statewide network and operations. “This combination is more than the sum of its parts,” says GCI Senior Vice President of Corporate Development Billy Wailand. “By bringing together complementary fiber routes, deep operational expertise, and long-term investment under one operating model, we’re building a network that is stronger, more resilient, and better suited to Alaska’s realities than either company could deliver on its own.”
Following the close of the transaction, GCI will operate the combined network. GCI says the integration of complementary networks will materially improve reliability for customers by increasing routing diversity and reducing the risk and duration of outages. The combined network footprint will support a self-healing, ringed network architecture that allows traffic to automatically reroute when disruptions occur.
Furthermore, GCI will complete Quintillion’s existing grant projects in progress. Also, shortly after signing, GCI will provide a $160 million unsecured loan to Quintillion.
Closing is anticipated following regulatory approval and satisfaction of customary closing conditions. Existing customer relationships, contractual obligations, and service arrangements are expected to continue without change following the close of the transaction.
Bank Street Group is acting as exclusive financial advisor, and Morgan Lewis is serving as legal advisor to Quintillion. TD Securities is acting as financial advisor, and Baker Botts and O’Melveny & Myers are serving as legal advisors to GCI Liberty.
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