Consolidated Communications Announces Strategic Financial investment from Searchlight Funds Partners

MATTOON, IL — Consolidated Communications declared that it has entered into an settlement in which  Searchlight Capital Partners agrees to commit $425 million in the Firm. The financial commitment has been unanimously accepted by the Consolidated Board of Directors.

In relationship with the expense from Searchlight, Consolidated will decrease internet personal debt by $325 million and start a refinancing of significantly all of its remaining $2 billion of outstanding credit card debt to lengthen credit card debt maturities and enhance liquidity by way of an upsize in revolver capability. As a final result, Consolidated expects to have entry to added money to accelerate fiber deployment and the Enterprise expects to lower its web leverage ratio to 3.5x on the receipt of the overall $425 million investment.

Boosting Speeds, Growing Gig Coverage and Extending Fiber Footprint

“Today’s announcement is a transformative function for Consolidated Communications, enabling us to promptly speed up our progress plans and deliver important benefits to our prospects and the communities we serve,” stated Bob Udell, president and CEO of Consolidated Communications. “With Searchlight’s expenditure, we will capitalize on advancement possibilities and remodel our business into a foremost, fiber-to-the-dwelling, enterprise and wholesale company. By leveraging our current dense main fiber community and an accelerated construct plan, Consolidated will substantially increase speeds, expand 1Gbps protection and strategically increase our fiber community across our business and carrier footprint to enhance on-web and around-net opportunities. We are enthusiastic to be partnering with Searchlight who we see as a strategic funds companion. Searchlight has substantial expertise in communications, fiber and fiber-to-the-residence, which will reward us as we start our multi-12 months fiber investment.”

Udell included, “Our Board and administration workforce performed a thorough analysis of our small business with a target on strengthening our equilibrium sheet, improving our network capabilities and positioning Consolidated to generate progress and provide desirable returns. We are self-assured this agreement is in the greatest interest of Consolidated and its shareholders, and will develop a much better and additional resilient company poised for prolonged-time period worth creation.”

“We have lengthy revered Consolidated for its confirmed observe history of functioning and financial excellence,” explained Andrew Frey, husband or wife at Searchlight Cash. “Strategically, Bob and his administration team have transformed Consolidated from a regional telephone enterprise into a leading fiber operator in the U.S. We are excited to supply capital and also companion with the Corporation to speed up its expense in fiber, and help the Enterprise drive accelerating income advancement.”

Persuasive Strategic and Money Positive aspects
The Firm intends to use the proceeds from this financial investment to greatly enhance its fiber infrastructure and accelerate investments in superior-progress areas of its organization. The Company’s accelerated expense exercise will produce important advantages to Consolidated shoppers including 1.4 million customers and modest companies, as nicely as the broader communities it serves, such as expanded 1Gbps coverage, broadband velocity boosts and a speedier, much more effective network in qualified regions. Consolidated will carry on investing in business and provider expansion by leveraging purchaser fiber builds to edge out its network. Together, these investments provide as the foundation of a multi-year reinvestment initiative that will enable Consolidated to produce exceptional expert services and an remarkable customer practical experience throughout all three shopper channels when returning to profits development.

Expense Framework
The $425 million expenditure motivation is structured in two phases. At the closing of the initially phase, Searchlight will spend $350 million in the Corporation in exchange for the appropriate to get an unsecured subordinated take note with a principal amount of close to $395 million and 8 p.c of the Company’s common inventory. In addition, Searchlight will receive a contingent payment proper (“CPR”) convertible, upon the receipt of particular regulatory and shareholder approvals, into an further 16.9 p.c of the Company’s common inventory.

On receipt of FCC and Hart Scott Rodino approvals and the pleasure of specific other customary circumstances, Searchlight will make investments an supplemental $75 million and will be issued the note, which will be convertible into shares of perpetual desired inventory of the Business with an aggregate liquidation choice equivalent to the principal sum of the take note at that time. In addition, the CPR will be convertible into additional shares of frequent stock, symbolizing 10.1 p.c of the Company’s popular stock. Upon completion of both levels, the common stock and CPR issued to Searchlight will characterize about 35 per cent of the Company’s popular stock on an as-transformed foundation.