Verizon (Nasdaq: VZ) has agreed to acquire Straight Path Communications (NYSE MKT: STRP), a Glen Allen, Va.-based owner of nationwide rights to millimeter-wave spectrum, for $3.1 billion in stock.
- Why it's the BFD: This is a massive premium. AT&T had originally agreed to acquire Straight Path in April for $95.63 per share, which was nearly triple where Straight Path had been trading ($36.48 per share). Verizon's big-foot puts that stock price multiple north of 5x. And that doesn't even include the $38 million termination fee that Verizon will pay to AT&T, on Straight Path's behalf.
- Bottom line: "Straight Path is so sought after because it has high-frequency airwaves that will be crucial to building out 5G networks. Both AT&T and Verizon are working on building out 5G technology and need those airwaves, which travel short distances, to support robust coverage." ― Kim Hart, Axios
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