American ISP Consolidated Communications will buy fibre network and data centre operator Enventis Corporation for an enterprise value of US$350m.
The deal is an all-stock transaction whereby Enventis investors will receive 0.7402 Consolidated shares for…
American ISP Consolidated Communications will buy fibre network and data centre operator Enventis Corporation for an enterprise value of US$350m.
The deal is an all-stock transaction whereby Enventis investors will receive 0.7402 Consolidated shares for each of their shares, which equates to US$16.50 per share and totals US$227.7m.
The price represents a 17.4% premium on Consolidated’s previous closing share price and a 27.2% premium on its 90-day average share price. Consolidated will also take on Enventis’ US$123m net debt.
Morgan Stanley, Wells Fargo and RBS have committed financing to part-fund the transaction. It takes the form of a US$140m bridge loan that will later be replaced by an add-on offering of Consolidated’s existing unsecured senior notes.
The two companies brought in a combined US$785m in revenue and US$332m in EBITDA for the last 12 months ending 31 March 2014.
Enventis, formerly trading as HickoryTech, has a fibre network spanning 4,200 miles that enables facilities-based operations in Minnesota, Iowa, North Dakota, South Dakota and Wisconsin. It serves 39,000 access lines, 21,000 high-speed internet customers, 12,000 digital TV customers, 90 fibre-to-the tower sites and operates six data centres.
Consolidated operates an IP-based network which it uses to offer fixed-line telephony, broadband and digital TV, currently across six states.
Bob Currey, Consolidated’s chairman and CEO, said: “This transaction combines two companies with similar strategies and cultures, resulting in a financially strong company with a robust balance sheet and attractive dividend payout ratio.”
The merger is subject federal and state regulatory approvals and the approval of both companies’ shareholders. It is expected to close in Q4.
Wells Fargo acted as financial adviser to Consolidated and Schiff Hardin provided legal advice.
Waller Capital acted as financial adviser to Enventis and Stinson Leonard Street was its legal adviser.
