Consolidated Communications (Nasdaq: CNSL) has put the final touches on its $324 million acquisition of Roseville, Calif.-based SureWest.
By acquiring SureWest, the Mattoon, Ill.-based Consolidated instantly extends its footprint into both California and Kansas. In terms of assets, the telco instantly expands its IPTV network reach, a growing Fiber to the Premises (FTTP) network and new wireless backhaul customers.
"The combined company provides a diverse set of revenues and cash flows across multiple markets resulting in a stronger, more competitive company," said Bob Currey, Consolidated's President and Chief Executive Officer, in the release announcing the closing.
Under the terms of the merger agreement, each record holder of SureWest common stock were allowed to make one of two election options, at or before the Election Deadline.
Shareholders could opt for a cash election of receiving $23 in cash, without interest, for each share of SureWest common stock. The second option is that they could elect to receive shares of Consolidated common stock having an equivalent value based on average trading prices for the 20-day period ending two days before the closing date of the merger.
Both service providers have continued to see their own share of legacy to IP service growing pains as more subscribers disconnect traditional PSTN service in favor of wireless or opting to go with a cable operator triple play package.
In Q1 2012, Consolidated reported that while traditional landline voice revenues declined, it saw a 4.4 percent year-over-year increase in broadband subscriber and added about 1,000 IPTV subscribers. Likewise, SureWest reported that Q1 revenue rose 3.6 percent, to $62.8 million, up from $60.6 million, due to an increase in broadband revenue.
The challenge for Consolidated, of course, will be not only in network and operations integration but naming a common management team that will run the new company.
- see the release
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