consolidated fairpoint mergerThe proposed Consolidated FairPoint merger moved a step closer to completion today when shareholders of both companies approved the plan. The merger achieved close to 100% approval, with 96% and 98% of FairPoint and Consolidated voting shareholders, respectively, supporting the merger.

The merger still requires federal and state regulatory approvals, which are expected within the next few months. Both companies issued press releases stating that they expect the transaction to close by mid-2017.

Assuming this happens, the Consolidated FairPoint merger will be the latest example of broad telecom and broadband industry consolidation that has been occurring over the last year or so.

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Consolidated FairPoint Merger
Mergers and acquisitions completed last year include a three-party deal involving Charter, Time Warner Cable and Bright House; Altice’s acquisition of Cablevision; and Zayo’s purchase of Electric Lightwave. This year already has seen the Verizon XO and Windstream Earthlink deals completed, with several other – including AT&T’s Time Warner purchase and CenturyLink’s Level 3 purchase – waiting in the wings.

The Consolidated FairPoint merger is different from most of these other recent deals, which typically have involved the acquirer seeking the other company in order to obtain assets it didn’t already have – or not in the volume it wanted. For example, Verizon bought XO to get spectrum suitable for 5G deployment, while Windstream bought EarthLink to strengthen its enterprise business – the same goal that is driving the CenturyLink Level 3 deal.

In FairPoint, however, Consolidated will be picking up the kind of asset these other companies are shying away from. At a time when traditional telcos are emphasizing business and broadband over their traditional business, Consolidated actually will see the percentage of its revenues that comes from legacy services increase assuming the FairPoint acquisition goes through.

Consolidated management doesn’t see that as a problem, however. To the contrary, you could say that the company sees nowhere to go but up with regard to the FairPoint properties.

CEO Bob Udell has argued that transitioning acquired properties away from their legacy businesses to a “stronger mix” of services is something Consolidated is “very good at.” Udell apparently was referencing previous Consolidated acquisitions such as Champaign Telephone Company and Enventis.

In today’s Consolidated press release, Udell said the merger would position the company “to leverage its extensive product and services portfolio across an expanded network bringing operational and service benefits to customers.”

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