Consolidated Communications To Acquire Enventis In $350 Mln Stock Deal

(RTTNews) - Consolidated Communications Holdings Inc. (CNSL) agreed to acquire 100 percent of Enventis Corp.'s (ENVE) 13.8 million, fully diluted, shares outstanding in an all-stock transaction valued at about $350 million.

Consolidated Communications and Enventis, formerly HickoryTech, announced that each of their respective Boards of Directors have approved a definitive agreement for Enventis to merge with Consolidated Communications.

As the terms of the agreement, Enventis shareholders will receive a fixed exchange ratio of 0.7402 shares of CNSL common stock for each share of ENVE common stock they own. Based on the closing price of CNSL on June 27, 2014, the consideration represents $16.50 per share for each ENVE share outstanding equating to a premium of 17.4 percent over the ENVE closing price on June 27, 2014 or 27.2 percent over the past 90-day average share price.

Consolidated Communications said it is maintaining its current annual dividend policy of approximately $1.55 per share, which it has consistently paid since its initial public offering in 2005.

On a pro forma basis, the strategic combination results in a company with approximately $785 million in revenue and $332 million in adjusted EBITDA (before synergies) for the 12 months ending March 31, 2014.

Enventis is headquartered in Mankato, Minnesota and operates a next-generation fiber network spanning 4,200 route miles that enables facilities-based operations in Minnesota and into Iowa, North Dakota, South Dakota and Wisconsin. It has over 500 employees and has transformed itself with approximately 80 percent of revenues coming from its business and broadband services.

The transaction is expected to generate annual operating synergies of approximately $14.0 million, which are expected to be achieved on a run-rate basis by the end of the second year after close.

Consolidated Communications expects to incur merger and integration costs, excluding closing costs, of approximately $17.4 million in operating expenses and $5.2 million in capital expenses over the first two years following closing.

The merger is expected to close in the fourth quarter 2014.