Alaska Communications Systems Group, Inc. (NASDAQ: ALSK)
(“Alaska Communications” or the “Company”) announced today that on
December 31, 2020 it entered into a definitive agreement pursuant
to which the Company will be acquired by a newly formed entity
owned by ATN International, Inc. (NASDAQ: ATNI) (“ATN”) and Freedom
3 Capital, LLC (“FC3”) in an all cash transaction valued at
approximately $332 million, including net debt. The merger will
result in Alaska Communications becoming a consolidated, majority
owned subsidiary of ATN and is expected to close in the second half
of 2021. Alaska Communications’ prior agreement to be acquired by
an affiliate of Macquarie Capital (“Macquarie”) and GCM Grosvenor
(“GCM”), through its Labor Impact Fund, L.P., has been
terminated.
Under the terms of the agreement, an affiliate of ATN will
acquire all the outstanding shares of Alaska Communications common
stock for $3.40 per share in cash. This represents a premium of
approximately 78% over the closing per share price of $1.91 on
November 2, 2020, the last trading day prior to the date when
Alaska Communications’ original merger agreement with Macquarie and
GCM was executed, a 70% premium to the 30-day volume weighted
average price up to and including November 2, 2020 and a 4% premium
to Macquarie and GCM’s prior binding agreement to acquire the
Company.
The merger agreement follows the determination by the Alaska
Communications Board of Directors, after consultation with its
legal and financial advisors, that the ATN proposal constituted a
“Superior Proposal” as defined in Alaska Communications’ previously
announced merger agreement with Macquarie and GCM. Consistent with
that determination and following the expiration of the negotiation
period with Macquarie and GCM required under such agreement, Alaska
Communications terminated that agreement. In connection with the
termination, Alaska Communications paid Macquarie and GCM a $6.8
million break-up fee.
David W. Karp, Chairman of the Alaska Communications Board of
Directors, said, "Today's announcement is the product of a
comprehensive process that demonstrates what a strong business the
team at Alaska Communications has built. The agreement with ATN is
a great result for our stockholders, who will receive significant
near-term value."
Bill Bishop, President and Chief Executive Officer of Alaska
Communications, stated, "This transaction represents an exciting
opportunity to augment our market position, as well as, expand our
capabilities to better serve our customers. ATN has extensive
telecommunications expertise, a strong track record of successfully
investing in and operating capital-intensive businesses and has a
strong financial position highlighted by its net cash position.
These are critical attributes that will support our strategy to
deliver superior customer service utilizing our fiber-based network
solutions. We firmly believe this transaction will allow us to
enhance our expanded fiber network services and drive long-term
value for our employees and customers in Alaska."
Michael Prior, Chairman and Chief Executive Officer of ATN,
stated, “This investment and merger allows us to enter a new market
with many similar characteristics to our existing operations in the
U.S. and elsewhere. Further, it aligns with our strategy to
leverage the broad capabilities of our operating platform to
enhance and augment leading providers of facilities-based
communications services in distinctive markets. ATN has a long
history of enabling its subsidiaries to gain and maintain strong
market positions by investing in high quality infrastructure, the
latest technologies and creative solutions to give customers a
superior experience. We recognize the same determination and
customer-centric approach in the Alaska Communications team. Our
industry is rapidly changing, and communications requirements have
never been more essential and critical than they are today. We look
forward to combining our resources and experience with Alaska
Communications’ market knowledge and reputation for superior
service to provide industry-leading communications products and
services to customers in Alaska and beyond.”
The merger is subject to the approval of Alaska Communications'
stockholders, regulatory approvals and other customary closing
conditions. The merger has fully committed debt and equity
financing and is not subject to any condition with regard to
financing. Alaska Communications’ Board of Directors has
unanimously approved the agreement and recommends that Alaska
Communications’ stockholders approve the proposed merger and merger
agreement. Alaska Communications expects to hold a special meeting
of stockholders to consider and vote on the proposed merger and
merger agreement as soon as practicable after the mailing of the
proxy statement to its stockholders.
TAR Holdings, LLC, which owns approximately 8.8% of the
outstanding shares of Alaska Communications common stock, has
entered into a voting agreement with ATN agreeing, among other
things, to vote in favor of the merger. The voting agreement will
automatically terminate upon the earliest of (a) the vote of
stockholders on the merger, (b) any termination of the Merger
Agreement, (c) any change in recommendation by the Board of Alaska
Communications and (d) 14 months after the signing of the Merger
Agreement. Under the voting agreement, TAR Holdings, LLC may sell
shares of the Company’s stock in the open market through a broker
dealer.
Advisors
Bank Street Group, LLC is serving as financial advisor and
Morrison & Foerster LLP is serving as legal advisor to ATN in
connection with the transaction.
B. Riley Securities, Inc. is serving as financial advisor and
Sidley Austin LLP is serving as legal advisor to Alaska
Communications in connection with the transaction.
About Alaska
Communications
Alaska Communications (NASDAQ: ALSK) is the leading provider of
advanced broadband and managed IT services for businesses and
consumers in Alaska. The Company operates a highly reliable,
advanced statewide data network with the latest technology and the
most diverse undersea fiber optic system connecting Alaska to the
contiguous U.S. For more information, visit
www.alaskacommunications.com or www.alsk.com.
About ATN International, Inc.
ATN International, Inc. (Nasdaq: ATNI), headquartered in
Beverly, Massachusetts, invests in and operates communications and
technology businesses in the United States and internationally,
including the Caribbean region, with a particular focus on markets
with a need for significant infrastructure investments and
improvements. Our operating subsidiaries today primarily provide:
(i) advanced wireless and wireline connectivity to residential and
business customers, including a range of high speed internet
services, mobile wireless solutions, video services and local
exchange services, and (ii) wholesale communications infrastructure
services such as terrestrial and submarine fiber optic transport,
communications tower facilities, managed mobile networks, and
in-building systems. For more information, please visit
www.atni.com.
About Freedom 3 Capital
Freedom 3 Capital invests in companies at inflection points. We
help middle-market companies address strategic growth opportunities
by delivering unique capital solutions. Our investment process
provides F3C the flexibility to tailor investment structures to the
industry dynamics, the company’s specific requirements and the
management team and owners’ long-term business objectives. Beyond
the value of our capital, we believe our private equity approach to
credit investing creates valuable, lasting partnerships with
stakeholders and management teams. F3C is currently investing out
of Fund 4 with offices in New York and Kansas City.
Additional Information and Where to Find It
This communication may be deemed to be solicitation material in
connection with the proposed acquisition of the Company by an
entity held by ATN and F3C, whereby the Company will become a
wholly owned subsidiary of an entity held by ATN and F3C (the
“proposed merger”), pursuant to a definitive Agreement and Plan of
Merger (the “Merger Agreement”) with Project 8 Buyer, LLC,
(“Parent”), and Project 8 MergerSub, Inc. (“Merger Sub”). The
proposed merger will be submitted to the Company’s stockholders for
their consideration at a special meeting of the stockholders. In
connection therewith, the Company intends to file relevant
materials with the United States Securities and Exchange Commission
(SEC), including a proxy statement on Schedule 14A, which will be
mailed or otherwise disseminated to the Company’s stockholders.
STOCKHOLDERS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT AS
WELL AS ANY AMENDMENTS OR SUPPLEMENTS AND ANY OTHER RELEVANT
DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY AND IN THEIR
ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE COMPANY AND THE PROPOSED MERGER.
Stockholders may obtain free copies of the definitive proxy
statement, any amendments or supplements thereto and other
documents containing important information about the Company or the
proposed merger, once such documents are filed with the SEC, free
of charge at the SEC's website at www.sec.gov, or from Alaska
Communications at alsk.com or by directing a request to the
Company’s Investor Relations Department at
investors@acsalaska.com.
Participants in the Solicitation
The Company and ATN and certain of their directors and executive
officers and other members of management and employees may be
deemed to be "participants" in the solicitation of proxies from the
Company’s stockholders in connection with the proposed merger.
Information about the Company's directors and executive officers
and their direct or indirect interests, by security holdings or
otherwise, is set forth in the Company’s proxy statement on
Schedule 14A for its 2020 annual meeting of stockholders filed with
the SEC on April 29, 2020. To the extent holdings of the Company’s
securities by such participants (or the identity of such
participants) have changed, such information has been or will be
reflected on Statements of Change in Ownership on Forms 3 and 4
subsequently filed with the SEC. Information about ATN directors
and executive officers and their direct or indirect interests, by
security holdings or otherwise, is set forth in Alaska
Communications proxy statement on Schedule 14A for its 2020 annual
meeting of stockholders filed with the SEC on August 6, 2020.
Additional information regarding the participants in the proxy
solicitation and a description of their direct or indirect
interests, by security holdings or otherwise, will be included in
the definitive proxy statement and may be included in relevant
documents filed with the SEC regarding the proposed merger, if and
when they become available. Free copies of these materials may be
obtained as described in the preceding paragraph.
Alaska Communications Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. The reader is cautioned not to rely on these
forward-looking statements. These statements are based on current
expectations of future events and these include statements using
the words such as will and expected, and similar statements. If
underlying assumptions prove inaccurate or known or unknown risks
or uncertainties materialize, actual results could vary materially
from the expectations of the Company. Risks and uncertainties
include, but are not limited to: (i) the risk that the transaction
may not be completed in a timely manner or at all, which may
adversely affect the Company’s business and the price of its common
stock, (ii) the failure to satisfy the conditions to the
consummation of the transaction, including the adoption of the
Merger Agreement by the stockholders of the Company, and the
receipt of certain governmental and regulatory approvals, (iii) the
failure of Parent and Merger Sub to obtain the necessary financing
pursuant to the arrangements set forth in the commitment letters
delivered pursuant to the Merger Agreement or otherwise, (iv) the
occurrence of any event, change or other circumstance that could
give rise to the termination of the Merger Agreement, (v) the
effect of the announcement or pendency of the transaction on the
Company’s business relationships, operating results, and business
generally, (vi) risks that the proposed transaction disrupts the
Company’s current plans and operations and potential difficulties
in the Company’s employee retention as a result of the transaction,
(vii) the outcome of any legal proceedings that may be instituted
against the Company or Parent or Merger Sub related to the Merger
Agreement or the transaction contemplated thereby. The foregoing
list of factors is not exhaustive. You should carefully consider
the foregoing factors and the other risks and uncertainties that
affect the businesses of the Company described in the “Risk
Factors” section of the Company’s Annual Report on Form 10-K for
the year ended December 31, 2019, filed with the SEC on March 16,
2020 and other reports and documents filed from time to time with
the SEC. These filings identify and address other important risks
and uncertainties that could cause actual events and results to
differ materially from those contained in the forward-looking
statements. Copies of these filings are available online at
https://www.alsk.com/. Forward-looking statements speak only as of
the date they are made. Readers are cautioned not to put undue
reliance on forward-looking statements, and the Company assumes no
obligation and does not intend to update or revise these
forward-looking statements, whether as a result of new information,
future events, or otherwise. The Company does not give any
assurance that it will achieve its expectations.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210104005179/en/
Alaska Communications Media Contact Heather Cavanaugh,
907-564-7722 Director, External Affairs and Corporate
Communications Alaska Communications Investor Contact
Tiffany Smith, 907-564-7556 Manager, Board and Investor Relations
investors@acsalaska.com
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