Consolidated Communications, a top 10 fiber provider in the United States, has entered into a definitive agreement to be acquired by affiliates of Searchlight Capital Partners and British Columbia Investment Management Corporation (BCI) in an all-cash transaction with an enterprise value of approximately $3.1 billion.
Searchlight, in the aggregate, is currently the beneficial owner of approximately 34% of Consolidated Communications’ outstanding shares of common stock, as well as the holder of 100% of the company’s outstanding Series A perpetual preferred stock.
Under the terms of the agreement, Searchlight and BCI will acquire all of Consolidated Communications’ common stock not already owned by Searchlight for $4.70 per share in cash.
Following a thorough review, “the Special Committee determined this transaction is the best path forward for Consolidated Communications and its shareholders. This transaction reflects the value of our business, taking into account both the growth opportunities of the company’s fiber build-out, as well as the potential risks associated with the company’s ongoing strategic transformation, including impacts from liquidity and leverage limitations within which the company must operate, the dynamic competitive pressures of a sector-wide fiber conversion and the imperative to continue our fiber build-out,” explained Robert J. Currey, Chairman of the Consolidated Communications Board and the Special Committee Chair.
The proposed transaction will result in Consolidated Communications becoming a private company and is expected to close by the first quarter of 2025, subject to customary closing conditions.
Bob Udell, President and Chief Executive Officer of Consolidated Communications mentioned that the company has been operating in a shifting economic environment over the course of this past year, resulting in higher operating costs and a challenging market for attractive financing options.
“While we are pleased with how we have managed the business despite these headwinds, several factors recently necessitated that we delay our estimated fiber build completion beyond 2026. As we navigate this environment, we will have increased flexibility as a private company and Searchlight will continue to be an outstanding partner as we advance our transformation to a leading fiber-first provider. We believe this continued partnership will create an outstanding outcome for the company, our customers and our employees,” Bob concluded.
