Enters Strategic Partnership to Expand
its Equipment and IT ServicesCompany to focus on core
network-based business and broadband solutions, forms strategic
partnership with ePlus to provide IT services nationwide
Consolidated Communications Holdings, Inc. (NASDAQ:CNSL)
(“Company”) today announces it has entered a definitive agreement
with ePlus Technology inc., and closed on the sale of its
Enterprise Services equipment and IT Services business. As
part of this transaction, Consolidated entered into a strategic
partnership with ePlus, a leading nationwide systems integrator of
technology solutions, to cross-sell both broadband network services
and IT Services. This partnership will provide Consolidated's
business customers access to a broader suite of IT solutions, and
will also provide ePlus customers access to Consolidated's business
network services.
“This transaction allows us extend our strategy of providing
technology solutions to customers across all of our markets while
we sharpen our focus on network-based, business and broadband
solutions," said Bob Udell, president and chief executive officer
of Consolidated Communications. "We have formed a partnership
with ePlus to continue to support our existing customers with IT
Services and intend to expand that offering to our entire service
area as we leverage ePlus' national footprint.”
“Consolidated's IT Services customers will gain access to ePlus’
full range of managed and professional services, leasing and
lifecycle management tools, and nationwide coverage by our
integration and logistics facilities," said Mark Marron, chief
executive officer of ePlus. "We are excited about the
strategic partnership we have formed to cross-sell services across
our geography, providing a full suite of integrated services to our
customers."
Consolidated's Enterprise Services equipment and IT Services
business, which was acquired with the Enventis acquisition in 2014,
contributed approximately $55 million of revenue in fiscal
2015. The Company expects the transaction to enhance its
revenue growth and margin profile going forward. There are
approximately 55 employees who support the equipment business.
The agreement and closing were finalized on December 5,
2016. Foros acted as the sole financial advisor and Schiff
Hardin acted as legal counsel to Consolidated Communications on
this transaction.
About Consolidated CommunicationsConsolidated
Communications Holdings, Inc. is a leading broadband and business
communications provider throughout its 11-state service area.
The company leverages its advanced fiber optic network and multiple
data centers to offer a wide range of communications solutions,
including data, voice, video, managed services, cloud computing and
wireless backhaul. Headquartered in Mattoon, Ill., the
Company has been providing services in many of its markets for more
than a century. Learn more at consolidated.com.
About ePlus inc. ePlus is a leading integrator
of technology solutions. ePlus enables organizations to optimize
their IT infrastructure and supply chain processes by delivering
complex information technology solutions, which may include managed
and professional services and products from top manufacturers,
flexible financing, and proprietary software. Founded in 1990,
ePlus has more than 1,000 associates serving commercial, state,
municipal, and education customers nationally and in the UK. The
Company is headquartered in Herndon, VA. For more information,
visit http://www.eplus.com/, call 888-482-1122, or
email info@eplus.com.
Safe HarborThe Securities and Exchange
Commission (“SEC”) encourages companies to disclose forward-looking
information so that investors can better understand a company’s
future prospects and make informed investment decisions.
Certain statements in this press release are forward-looking
statements and are made pursuant to the safe harbor provisions of
the Securities Litigation Reform Act of 1995. These
forward-looking statements reflect, among other things, current
expectations, plans, strategies, and anticipated financial results
of Consolidated Communications Holdings, Inc. (the “Company”) and
FairPoint, both separately and as a combined entity. There
are a number of risks, uncertainties, and conditions that may cause
the actual results of the Company and FairPoint, both separately
and as a combined entity, to differ materially from those expressed
or implied by these forward-looking statements. These risks
and uncertainties include the timing and ability to complete the
proposed acquisition of FairPoint by the Company, the expected
benefits of the integration of the two companies and successful
integration of FairPoint’s operations with those of the Company and
realization of the synergies from the integration, as well as
a number of factors related to the respective businesses of the
Company and FairPoint, including economic and financial market
conditions generally and economic conditions in the Company’s and
FairPoint’s service areas; various risks to stockholders of not
receiving dividends and risks to the Company’s ability to pursue
growth opportunities if the Company continues to pay dividends
according to the current dividend policy; various risks to the
price and volatility of the Company’s common stock; changes in the
valuation of pension plan assets; the substantial amount of debt
and the Company’s ability to repay or refinance it or incur
additional debt in the future; the Company’s need for a significant
amount of cash to service and repay the debt and to pay dividends
on the common stock; restrictions contained in the debt agreements
that limit the discretion of management in operating the business;
legal or regulatory proceedings or other matters that impact the
timing or ability to complete the acquisition as contemplated,
regulatory changes, including changes to subsidies, rapid
development and introduction of new technologies and intense
competition in the telecommunications industry; risks associated
with the Company’s possible pursuit of acquisitions; system
failures; losses of large customers or government contracts; risks
associated with the rights-of-way for the network; disruptions in
the relationship with third party vendors; losses of key management
personnel and the inability to attract and retain highly qualified
management and personnel in the future; changes in the extensive
governmental legislation and regulations governing
telecommunications providers and the provision of
telecommunications services; telecommunications carriers disputing
and/or avoiding their obligations to pay network access charges for
use of the Company’s and FairPoint’s network; high costs of
regulatory compliance; the competitive impact of legislation and
regulatory changes in the telecommunications industry; liability
and compliance costs regarding environmental regulations; the
possibility of disruption from the integration of the two companies
making it more difficult to maintain business and operational
relationships; the possibility that the acquisition is not
consummated, including, but not limited to, due to the failure to
satisfy the closing conditions; the possibility that the merger may
be more expensive to complete than anticipated, including as a
result of unexpected factors or events; and diversion of
management’s attention from ongoing business operations and
opportunities. A detailed discussion of risks and
uncertainties that could cause actual results and events to differ
materially from such forward-looking statements are discussed in
more detail in the Company’s and FairPoint’s respective filings
with the SEC, including the Annual Report on Form 10-K of the
Company for the year ended December 31, 2015, which was filed with
the SEC on February 29, 2016, under the heading “Item 1A—Risk
Factors,” and the Annual Report on Form 10-K of FairPoint for the
year ended December 31, 2015, which was filed with the SEC on March
2, 2016, under the heading “Item 1A—Risk Factors,” and in
subsequent reports on Forms 10-Q and 8-K and other filings made
with the SEC by each of the Company and FairPoint. Many of these
circumstances are beyond the ability of the Company and FairPoint
to control or predict. Moreover, forward-looking statements
necessarily involve assumptions on the part of the Company and
FairPoint. These forward-looking statements generally are
identified by the words “believe,” “expect,” “anticipate,”
“estimate,” “project,” “intend,” “plan,” “should,” “may,” “will,”
“would,” “will be,” “will continue” or similar expressions.
Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause actual results,
performance or achievements of the Company and FairPoint, and their
respective subsidiaries, both separately and as a combined entity
to be different from those expressed or implied in the
forward-looking statements. All forward-looking statements
attributable to us or persons acting on the respective behalf of
the Company or FairPoint are expressly qualified in their entirety
by the cautionary statements that appear throughout this press
release. Furthermore, forward-looking statements speak only
as of the date they are made. Except as required under the
federal securities laws or the rules and regulations of the SEC,
each of the Company and FairPoint disclaim any intention or
obligation to update or revise publicly any forward-looking
statements. You should not place undue reliance on
forward-looking statements.
Important Merger Information and Additional
Information
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval. In connection with the proposed
transaction, the Company and FairPoint will file relevant materials
with the SEC. The Company will file a Registration Statement
on Form S-4 that includes a joint proxy statement of the Company
and FairPoint and which also constitutes a prospectus of the
Company. The Company and FairPoint will mail the final joint
proxy statement/prospectus to their respective stockholders.
Investors are urged to read the joint proxy
statement/prospectus regarding the proposed transaction when it
becomes available, because it will contain important
information. The joint proxy statement/prospectus
and other relevant documents that have been or will be filed by the
Company and FairPoint with the SEC are or will be available free of
charge at the SEC’s website, www.sec.gov, or by directing a request
when such a filing is made to Consolidated Communications Holdings,
Inc., 121 South 17th Street, Mattoon, IL 61938, Attention: Investor
Relations or to FairPoint Communications, Inc., 521 East Morehead
Street, Suite 500, Charlotte, North Carolina 28202, Attention:
Secretary.
The Company, FairPoint and certain of their respective
directors, executive officers and other members of management and
employees may be considered participants in the solicitation of
proxies in connection with the proposed transaction.
Information about the directors and executive officers of
the Company is set forth in its definitive proxy statement, which
was filed with the SEC on March 28, 2016. Information about the
directors and executive officers of FairPoint is set forth in its
definitive proxy statement, which was filed with the SEC on March
25, 2016. These documents can be obtained free of
charge from the sources listed above. Investors may obtain
additional information regarding the interests of such participants
by reading the joint proxy statement/prospectus the Company and
FairPoint will file with the SEC when it becomes available.
Contacts
Jennifer Spaude, Consolidated Communications, jennifer.spaude@consolidated.com, 507-386-3765
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