CHARLOTTE – Consolidated Communications Holdings Inc said on Monday it would buy Charlotte-based broadband service provider FairPoint Communications Inc in an all-stock deal valued at $1.5 billion, including debt.Based in Illinois, Consolidated’s acquisition of FairPoint marks the fifth such deal in the past two months as growing demand for data and video services drives companies to expand their fiber optic networks in new regions. Consolidated is a broadband and business communications provider in 11 U.S. states. FairPoint provides service in 17 states. The deal will help Consolidated expand into northern New England, adding about 17,000 fiber route miles (27,000 km) in the region. Shareholders of FairPoint will receive 0.73 shares of Consolidated for each share held. Excluding debt, the equity portion of the deal is valued at about $561 million, or $20.72 per FairPoint share, according to Reuters calculations. This represents a premium of 21.9 percent to FairPoint’s Friday close. FairPoint’s shares were up 11.9 percent at $19 in morning trading and touched a 1-1/2 year high of $19.50, while Consolidated Communication’s shares were down 4.19 percent at $27.19. FairPoint investor hedge fund Maglan Capital earlier this year pressured the company to sell itself. Maglan took equity in the company by converting its debt as part of a loan-to-own strategy stemming from FairPoint’s 2009 bankruptcy. “They do need to be part of a larger enterprise to … get the best value for the business and shareholders,” Maglan President David Tawil said. Consolidated will assume FairPoint’s long-term debt of about $900 million as of Sept. 30 and own about 71.3 percent of the combined company on a pro forma basis. FairPoint and Consolidated together generated pro forma annual revenue of more than $1.5 billion as of Sept. 30. The transaction, which is expected to close by mid-2017, is expected to add “meaningfully” to Consolidated’s cash flow per share in the first year following the completion of the deal. “This is the time where (if) you are thinking about an acquisition, you want to get it done now because … from a financing perspective, the markets may not be favorable six months from now,” Drexel Hamilton analyst Barry Sine said, explaining that interest rates may rise soon.
Raleigh, NC On Wednesday the North Carolina House of Representatives voted to override Governor Roy Cooper’s veto of a bill to put political party indicators back on the ballots in judicial elections. The final […]
WASHINGTON, D.C. President Donald Trump showed a different side in his first address to Congress. This Trump was part deal-maker, part salesman, asking for unity and trying to repackage his populist message in more […]
WASHINGTON, D.C. Republican presidential candidate Donald Trump said on Monday that health is an issue in the election campaign after his Democratic rival, Hillary Clinton, revealed she had pneumonia, and he said he would […]