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The agreement will result in Consolidated Communications becoming a private company.
A top-ten fiber provider in the United States has agreed to an all-cash acquisition that will be worth over $3 billion.
Consolidated Communications, which has a fiber network spanning nearly 60,000 miles, announced Oct. 16 that the company has entered into an agreement to be acquired by affiliates of Searchlight Capital Partners and British Columbia Investment Management Corporation (BCI).
The company said the agreement will result in Consolidated Communications becoming a private company.
“We believe this transaction provides substantial value for our shareholders while also enhancing our flexibility to continue the execution of our fiber expansion strategy,” said Bob Udell, President and Chief Executive Officer of Consolidated Communications. “We have 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.”
Currently, Searchlight owns about 34 percent of Consolidated Communications’ outstanding shares of common stock, according to an announcement about the acquisition. The announcement goes on to state Searchlight is the holder of 100 percent of Consolidated Communications’ outstanding Series A perpetual preferred stock.
Searchlight, with offices in the U.K., the U.S., and Canada, is a private investment firm with approximately $11 billion in assets under management, according to a summary about the company. BCI, which calls itself one of the largest institutional investors in Canada with over $200 billion in gross assets under management, manages a public and private market portfolio of investments on behalf of British Columbia public-sector clients.
“Under the terms of the agreement, Searchlight and BCI will acquire all of the Consolidated (Communications) common stock not already owned by Searchlight for $4.70 per share in cash,” the announcement sated.
The deal to acquire Consolidated Communications, headquartered in Illinois, is expected to close by the first quarter of 2025. Consolidated Communications said they will not hold a regularly scheduled earnings conference call in November as a result of the transaction.
Udell said Consolidated Communications’ team was pleased with how the business was managed despite the challenges but added that several factors have delayed the company’s planned fiber build to a completion date 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,” he said.
Udell said he believes the partnership will lead to an “outstanding outcome” for Consolidated Communications’ customers and employees.
According to the announcement, the deal, worth $3.1 billion including an assumption of debt, is subject to customary closing conditions, including receipt of regulatory approvals and approval of shareholders that represent the company’s outstanding shares.
