Uniti Group (UNIT), mcap=$2.9bn, price $11.7 vs. $13.9

Pitch: Rural telecom infrastructure REIT, mispriced due to the bankruptcy taint of their key customer Windstream (66% of revenues) as well as fuss on lease renewal in 2030. Highly predictable cash flows UNIT has been approached by EQT Partners last year with a bid of $15, rejected by management. Likely to be acquired and recombined with Windstream.

Valuation: Low current multiple of 8x AFFO and a 4.75% dividend yield. Undervalued relative to peers. The private market value of UNIT is 15-20x EBITDA for their fiber assets and ~10x EBITDA for the Windstream-Lease resulting in a target price of $18.

Exp. gain: 50%

Full KKR write-up (free guest account required):


Leave a Comment