Illinois company closes $1.3B FairPoint acquisition
Consolidated Communications Holdings Inc. completed its acquisition of FairPoint Communications Inc. on Monday.
The all-stock transaction is valued at approximately $1.3 billion, including debt and based on present equity value, according to a news release.
Illinois-based Consolidated (NASDAQ: CNSL) stated that the acquisition of FairPoint (NASDAQ: FRP) will add 22,000 fiber route miles to its fiber network without any overlapping markets. The combined network spans 24 states and more than 36,000 fiber route miles, making Consolidated the ninth-largest fiber provider in the United States.
In gaining the unanimous approval of the Maine Public Utilities Commission in June, Consolidated agreed to spend over the next three years $17.4 million annually on facilities and infrastructure in Maine to build out FairPoint’s broadband networks and upgrade speeds.
Consolidated also plans to expand its cloud services product suite to FairPoint markets and stated the merger “provides a meaningful increase in scale to address the ever-changing competitive landscape.”
The transaction is expected to generate annual run rate cost savings of approximately $55 million, which are expected to be achieved within two years after completion of the merger. “Consolidated Communications’ mission is to turn technology into solutions, connecting people and enriching how they work and live,” Bob Udell, president and chief executive officer of Consolidated Communications, said in the release. “The financial benefits associated with the combination in the form of cost savings and reduced financial leverage provide us additional operating and strategic flexibility going forward.”
The combined company has around 4,400 employees across 24 states, with about 980 of those jobs in Maine.
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