MATTOON, IL – Consolidated Communications Holdings, Inc. (NASDAQ:CNSL) has announced the completion of its merger with Condor Merger Sub Inc., a subsidiary of Condor Holdings LLC, which is affiliated with investment funds managed by Searchlight Capital Partners (WA:CPAP), L.P.
The transaction comes at a crucial time for the telecommunications firm, which carries a substantial $2.4 billion debt burden and reported a net loss of $233.88 million in the last twelve months.
According to InvestingPro analysis, the company has been quickly burning through cash, with negative free cash flow of $333 million. The transaction, effective as of today, results in the telecommunications firm becoming a privately held company and its common stock being delisted from the NASDAQ stock exchange.
On today, the company filed the necessary paperwork with the Delaware Secretary of State, marking the official completion of the merger as outlined in the agreement dated October 15, 2023.
As part of the merger, each outstanding share of Consolidated Communications' common stock, not already held by Condor Holdings or its subsidiaries, has been converted into the right to receive $4.70 in cash, excluding shares held by those who exercised appraisal rights under Delaware law.
The merger price comes as the stock traded near its 52-week high of $4.75, with InvestingPro data showing relatively low price volatility throughout the negotiation period. Subscribers to InvestingPro gain access to detailed merger analysis and over 8 additional ProTips for similar investment opportunities.
In line with the merger agreement, the company's 2005 Long-Term Incentive Plan was terminated at the time of the merger, and all related restricted stock and performance share awards were settled in cash or converted into restricted cash awards based on the merger consideration.
As a result of the merger, the board of directors of Consolidated Communications resigned, and the directors of Condor Merger Sub Inc. took over the roles. The officers of Consolidated Communications prior to the merger will continue in their positions in the new structure.
With the delisting from NASDAQ, Consolidated Communications also intends to terminate the registration of its common stock and suspend its reporting obligations under the Securities Exchange Act of 1934.
The merger has led to significant changes in the rights of security holders, with shareholders ceasing to have any rights other than to receive the cash consideration for their shares. The company's certificate of incorporation and bylaws were also amended and restated to reflect the new ownership structure.
This strategic move marks a significant shift for Consolidated Communications, as it transitions from a public company to a private entity under the ownership of an affiliate of Searchlight Capital Partners.
The information in this article is based on a press release statement.
In other recent news, Consolidated Communications Holdings, Inc. has ratified a merger agreement with Condor Holdings LLC and Condor Merger Sub Inc., a decision that comes after a legal challenge to the approval process. The company has also secured significant financing for fiber infrastructure expansion, including a $60 million loan and an additional $80 million loan. These developments are part of Consolidated Communications' ongoing strategy to enhance its broadband network capabilities.
The company is expected to finalize its merger with Condor Merger Sub Inc., following the receipt of the last required regulatory approval, marking a significant milestone for the telecommunications company. Analyst firm Citi maintains a Neutral rating on the company's shares and indicates a high likelihood of 98% for the acquisition to finalize under the proposed terms.
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