Consolidated Communications (CNSL) announced it has entered into a definitive agreement to acquire FairPoint Communications in an all-stock merger transaction valued at approximately $1.5 billion, including debt.
Solution provider ePlus Technology acquired the IT services equipment and integration business of Consolidated Communications Holdings in a move ePlus said would expand its geographic reach into the Upper Midwest. The New York-based Savings Bank Of New York Mellon Corp has invested 0% in FairPoint Communications Inc (NASDAQ:FRP).
Udell will lead the combined company, and one director from FairPoint's board will join the Consolidated Communications board of directors. Officials with the company say the Consolidated Communications purchase will save $55 million through "estimated operating synergies".
The CWA union primarily represents about 150 FairPoint workers in northern New England. With the acquisition, Consolidated Communications, as the company would be known, would operate in 24 states and be based in Mattoon.
"We've got a really successful track record of integrating companies, and we have a very disciplined approach and a playbook that we will draw on", Spaude said. Consolidated IT Services business provides data center, unified communications, networking, and security solutions to a diverse set of domestic and worldwide customers including commercial, enterprise, and state, local, and education (SLED) organizations in the upper Midwest. Consolidated is also less labor-intensive, with 1,783 employees at the end of 2015, nearly 1,000 less than FairPoint, despite having $776,000 less 2015 revenue than the North Carolina company and about 90 percent of FairPoint's sales.
If approved by shareholders, the deal would close by mid-year 2017.
I am confident the new combined company will accelerate our progress and bring numerous benefits to our customers, employees and shareholders.
Illinois-based Consolidated Communications says it's buying FairPoint for $1.5 billion, starting a new chapter in the troubled history of northern New England's largest telecommunications network.
Consolidated Communications' Board of Directors has declared a quarterly dividend of $0.38738 per share consistently for 46 quarters since its initial public offering in 2005. FairPoint reported a net debt of about $887 million as of September 30.
Last month, FairPoint announced company-wide layoffs.
FairPoint's unionized workforce is welcoming the sale after contentious relations with management following the Verizon deal in 2007.
At that time, the union workers chose to strike two days after FairPoint froze workers' pensions in favor of 401 (k) plans going forward and imposed a contract that requires workers to contribute to health care costs; other provisions would allow the company to hire contractors and eliminate retiree healthcare benefits.
Porter expects the companies to file a petition for review soon.
A key concern of the CWA and IBEW union members is maintaining job security.
"As a result of the expanded fiber footprint, Consolidated will be able to provide up to 32 markets with access to Ethernet connections capable of symmetrical 1 Gbps speeds", FierceTelecom said.