Consolidated Communications to buy FairPoint Communications in $1.5 billion deal

Consolidated Communications to buy FairPoint in $1.5 billion deal

Consolidated Communications Holdings Inc said on Monday it would buy broadband service provider FairPoint Communications Inc in an all-stock deal valued at $1.5 billion, including debt, to boost its fiber network.

Shareholders of FairPoint Communications will receive 0.73 shares of Consolidated Communications 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.

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 Communications together generated pro forma annual revenue of more than $1.5 billion as of Sept. 30.

(Reporting by Aishwarya Venugopal in Bengaluru; Editing by Anil D’Silva)



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