Consolidated Makes a Move on the Northeast, Buys FairPoint

December 5th, 2016 by · 1 Comment

The final months of this year have seen a flurry of infrastructure deals, and this week starts off with another.  Consolidated Communications has entered into a definitive agreement to acquire FairPoint Communications in an all-stock deal worth about $1.5B.

FairPoint operates in 17 states with 21,000 route miles of fiber hooking up more than 3000 on-net buildings.  They are of course also an ILEC, and therefore have a whole lot of copper to go along with that.  Their main territories are in the upper northeast, which they acquired from Verizon a few years back before taking a trip through chapter 11.

Consolidated operates a mix of incumbent and competitive assets.  Two years ago they bought Enventis, moving into the Minnesota and Dakotas in force.  Before that, their big inorganic move was the acquisition of SureWest.  More recently, Consolidated added to its Illinois footprint with the purchase of CTC.

The combined company will have $1.5B in revenue and $566M in adjusted EBITDA, with another $55M in annualized operating synergies expected in the first two years.  There’s not a lot of infrastructure overlap involved, so much of those synergies will surely come out of the administrative side of things.

Consolidated shareholders will own some $71.3% of the combined company, with Fairpoint’s shareholders holding the other 28.7%.


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Categories: Fiber Networks · ILECs, PTTs · Mergers and Acquisitions

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