Fiber provider Consolidated Communications Holdings Inc. entered a definitive agreement to be acquired by affiliates of Searchlight Capital Partners, L.P. — which already owns about one-third of the company — and the British Columbia Investment Management Corporation (BCI). It is an all-cash transaction valued at about $3.1 billion that includes assumption of debt.
Searchlight currently is the beneficial owner of about 34% of the company’s outstanding shares of common stock and holds all of Consolidated’s outstanding Series A perpetual preferred stock. The agreement calls for Searchlight and BCI to acquire all of Consolidated Communication’s common stock not already owned by Searchlight for $4.70 per share in cash.
The transaction was unanimously approved by a special committee of independent and disinterested directors of the board. Consolidated’s board of directors — minus those who recused due to affiliations with Searchlight and BCI — approved the proposed transaction.
“The Special Committee thoroughly reviewed their proposal, considering the benefits of the transaction against other strategic alternatives available to the company, including continuing as a publicly traded company,” Robert J. Currey, the chairman of the Consolidated Communications Board and the Special Committee chair, said in a press release. “We also considered capital structure alternatives, analyzing the potential availability, cost and feasibility of injecting additional capital into the business. Following this review, the Special Committee determined this transaction is the best path forward for Consolidated Communications and its shareholders.”
The transaction is expected to close by the first quarter of 2025.
The deal between the three entities became public in April. At the time, plans to establish the Special Committee were announced. Searchlight had acquired its share of Consolidated through a $425 million investment made in 2020 and 2021. Consolidated said at the time that the investments would be used for fiber deployments. Searchlight also has investments in Uniti Group and Ziply.
The company brands as both Consolidated and Fidium Fiber. It has almost 59,000 route miles and operates in Vermont, California, Illinois, Maine, Minnesota, New Hampshire, Pennsylvania and Texas.