Alaska Communications has entered into a definitive agreement to be bought by an affiliate of Macquarie and GCM in an all-cash transaction deal at $300 million, including debt.
The deal, which is expected to close in the second half of next year, will result in Alaska Communications becoming a privately held company. The transaction still needs the approval of Alaska Communications' stockholders, as well as passing customary closing conditions and garnering regulatory approvals.
On Sunday, Wave, RCN, Grande and enTouch, which are managed under the Astound Broadband umbrella, were sold by TPG Capital and Patriot Media Management to Stonepeak Infrastructure Partners for $8.1 billion. That deal also included debt, which Astound CEO Jim Holanda said made it more attractive to potential buyers.
Under terms of the agreement, Alaska Communications can solicit better offers from third-parties for up to 30 days through Dec. 3. Alaska Communication's board of directors, along with its advisors, intend to fish for superior buy-out proposals over the next 30 days.
Earlier this year, Macquarie Infrastructure Partners (MIP) benefitted from a similar arrangement after it reached a $2.9 billion deal to buy Cincinnati Bell. Near the end of December, Toronto-based conglomerate Brookfield Infrastructure Partners LP announced it was buying Cincinnati Bell for $2.6 billion, but ultimately was out-bid by MIP.
Under the terms of the agreement, an affiliate of Macquarie and GCM (through its Labor Impact Fund) will acquire all the outstanding shares of Alaska Communications common stock for $3 per share in cash, which represents a premium of approximately 57% over the closing per share price of $1.91 on Monday, the last trading day prior to the date the merger agreement was executed, and a premium of approximately 50.8% over the 30-day volume weighted average price Nov. 2.
TAR Holdings, LLC, which owns approximately 8.8% of the outstanding shares of Alaska Communications common stock, has entered into a voting agreement with Macquarie and GCM to vote in favor of the deal.
Alaska Communications' stock was up by close to 60% during late morning trading on Tuesday.
"This transaction with Macquarie Capital and GCM represents an exciting opportunity to enhance our financial position and expand our resources to better serve our customers," said Bill Bishop, president and CEO of Alaska Communications, in a statement. "Macquarie Capital has extensive experience navigating the complexities and issues associated with public-to-private transactions, as well as addressing the various regulatory regimes associated with communications infrastructure transactions.
"Finally, GCM’s Labor Impact Fund provides strategic value to our business both through its experience in the telecommunications sector and in fostering partnerships with a unionized workforce. We firmly believe this transaction will allow us to enhance our expanded fiber network services and drive long-term value for our customers in Alaska and the Lower 48."
Alaska Communications, which was founded in 1998, provides broadband and managed IT services for its business and residential customers in Alaska. It also operates an undersea fiber-optic system to connect Alaska to the contiguous U.S.