Telecom cooperatives are rarely sold. But the sale of Wyoming-based cooperative Tri-County Telephone Association, which closed December 31, is an exception to the rule.
The new owner is BHT Holdings, a company owned primarily by Neil Schlenker, a local resident and member of the cooperative. According to local news outlet the Lovell Chronicle, Schlenker also aims to acquire other small telcos and will consider companies in Colorado, Nebraska and Idaho. Schlenker reportedly plans to retain all current TCT employees and has promised to invest in infrastructure.
Telecom Cooperative Value Was Substantial
According to a fact sheet issued by Charlesmead Advisors, which provided valuation analysis for the deal, the selling price was $46 million — including $29 million in cash payments to cooperative members, retirement of debt, and commitments to network enhancements and rate reductions.
Nearly four in five TCT members (79%) voted in favor of the sale, Charlesmead Advisors said. Undoubtedly Schlenker’s assurances were a persuading factor – as was a payout of $25,000 to $30,000 per member reported by the Lovell Chronicle.
Does This Portend a Trend?
Not every community has a citizen or group of citizens willing and able to purchase the local telco, so there is no indication that the TCT/ BHT deal portends similar sales moving forward.
On the other hand, the price that TCT commanded is likely to get the attention of other rural residents. And at a time when some view rural telecom consolidation as inevitable, it wouldn’t be surprising to see some communities served by telecom cooperatives looking for similar deals – particularly now that they realize what an individual member’s share could be worth.
5 thoughts on “$25,000 Per Member? Uncommon Sale Reveals Potential Telecom Cooperative Value”
Wow! Big checks for these folks. Who wouldn't do this.
The math is curious to me…Other source of info reflects there were right at 5000 member of that Coop. In order for them to receive $25,000 on average there would have had to have been $129 million not $29 million in cash payments to members…So did they maybe get $2500 per member?
These numbers were confirmed by sources with knowledge of the deal. Actual payments are based on "term of membership," so there is some variability.
Which #'s were confirmed. $25,000 or $2,500?
$29 million divided up between 850 members for an average of $34,000 was quoted in a news report. Why only 850 members when they have in excess of 11,000 customers has to do with the bylaws.