Boingo set to go private in $854M sale

airport
Airports remain a big part of Boingo's business, but it has diversified in recent years.(Getty Images)

Boingo Wireless is going back into the private sector under plans to be acquired by an affiliate of Digital Colony Management. The deal is valued at about $854 million.

Under the terms of the pact, Digital Colony will acquire all the outstanding shares of Boingo common stock for $14 per share in cash. Digital Colony will assume $199 million of Boingo’s net debt obligations. The acquisition price represents a 23% premium to Boingo’s closing price of $11.40 on February 26.

“We are pleased to have reached this agreement with Digital Colony, which will deliver significant and immediate value to Boingo’s stockholders and concludes a robust strategic review process undertaken by Boingo over the past year,” said Boingo CEO Mike Finley in a statement. “We believe Digital Colony’s expertise owning and operating digital infrastructure businesses, combined with its relationships, resources and access to long-term, private capital markets, will provide greater flexibility for Boingo to continue advancing its business strategy.”

Digital Colony bills itself as one of the world’s largest digital infrastructure investment firms focused on four key segments: data centers, macro cell towers, fiber networks and small cell networks.

It was just over a year ago that reports emerged that Boingo was looking at a potential sale. In December of 2019, Boingo disclosed that it was chopping 16% of its workforce, or about 80 employees, as part of an effort to increase profitability. 

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The transaction, which is subject to Boingo shareholder approval, regulatory approvals and the usual closing conditions, is expected to close in the second quarter of this year. Boingo’s board already unanimously approved the transaction.

Full-year 2020 results

Boingo also reported its full-year 2020 results on Monday. Covid-19 hit its legacy retail and advertising products especially hard, as well as getting the blame for pushing several projects into 2021.

The company reported revenue of $237.4 million, a decrease of 10% compared to $263.8 million in 2019. Net cash provided by operating activities of $72.5 million decreased 33.3% compared to $108.7 million in 2019.

Boingo said it signed a Wi-Fi offloading agreement with a Tier 1 carrier, but didn’t identify it. This carrier’s customers started using Boingo’s high-speed Wi-Fi networks via carrier offloading at one airport last year, with more airports expected to launch in 2021.

RELATED: Boingo's global Wi-Fi connections decline nearly 80% in Q2 as travel stalled

The company said it had a total of 74 distributed antenna system (DAS) venues live as of December 21, 2020, comprised of 41,200 DAS nodes and another 11,500 nodes in backlog. That compares to 73 live venues and 38,100 nodes as of December 31, 2019.

Boingo was founded in 2001 by Earthlink co-founder Sky Dayton to address the patchy state of Wi-Fi networks at the time. It acquired Concourse Communications Group in 2007, extending into airports across the country. In more recent years, it has expanded to serve military bases and multi-family housing units.