Recent Mergers & Acquisitions In The Telecommunications Industry – November 10, 2021
Mergers & Acquisitions: Hanson Communications Acquiring Consolidated Communications’ Ohio Assets
November 10, 2021 – The FCC’s Wireline Competition Bureau is seeking comment on a Section 214 application filed by Consolidated Communications of Ohio Company, LLC
(Consolidated Ohio) and Hanson Communications of Ohio, LLC (Hanson), requesting consent to transfer substantially all the assets of Consolidated Ohio to Hanson. Comments are due on or before November 24, 2021, and reply comments are due December 1, 2021.
Consolidated Ohio is a wholly-owned, indirect subsidiary of Consolidated Communications Holdings, Inc. Consolidated Ohio operates as an incumbent local exchange carrier (LEC) serving three study areas: Columbus Grove Telephone Company; Germantown Independent Telephone Company; and Orwell Telephone Company. In 2015, Consolidated Ohio’s predecessors in interest – FairPoint – accepted Connect America Fund (CAF) Phase II support, which required it to offer voice and broadband service to 1,247 locations in the state over a six-year term, in exchange for annual support of $420,997.00. Consolidated Ohio elected to receive a seventh year of CAF Phase II support. To date, Consolidated Ohio has reported deployment to 1,248 qualifying locations, meeting its CAF Phase II obligations.
Hanson is a privately held Ohio LLC created for the purpose of acquiring and operating the assets of Consolidated Ohio. Hanson is wholly-owned by Hanson Communications, Inc. (HCI), a Minnesota holding company. HCI’s eight incumbent LEC operating companies serve approximately 10,061 access lines and provide broadband connections to approximately 15,357 customers in Minnesota, Nebraska, South Dakota, and Ohio. According to the application, “HCI’s operating companies have deployed approximately 1,500 miles of fiber optic cable, which facilitate high speed internet access, high-definition video services, and will be able to support wireless and wireline service for the delivery of 5G technology in rural America.”
Pursuant to the terms and conditions of an asset purchase agreement, Consolidated Ohio will sell and assign to HCI, substantially all of the assets, property, and rights of Consolidated Ohio. Following the closing of the transaction, the assets, property, and rights currently held by Consolidated Ohio will be owned and operated by Hanson, a subsidiary of HCI created for that purpose.
Consolidated Communications Holdings, Inc. announced the deal to sell its Ohio assets in September 2021. According to the company’s press release, “Consolidated’s Ohio operations contributed approximately $9 million of revenue in fiscal 2020 and includes approximately 4,000 access lines and 3,900 Internet connections.” The deal is expected to be completed by the end of 2021.
Mergers & Acquisitions: Reservation Telephone Cooperative Acquiring Midstate Telephone Company & Midstate Communications
November 10, 2021 – The FCC’s Wireline Competition Bureau is seeking comment on a Section 214 application requesting the transfer of control of Midstate Telephone Company, LLC and Midstate Communications, Inc. to Reservation Telephone Cooperative (RTC). Comments are due on or before November 24, 2021. Reply comments are due December 1, 2021.
Midstate Telephone Company is a rural incumbent local exchange carrier (LEC) serving approximately 2,000 customers in the Stanley, Medora, and Portal exchanges North Dakota. Midstate Communications is a rural incumbent LEC serving approximately 1,000 customers in the Beach exchange in North Dakota.
RTC is a rural incumbent LEC serving approximately 11,000 customers in 20 exchanges in northwestern North Dakota. RTC is a North Dakota cooperative that is owned by its member-subscribers. No single member-subscriber owns or controls more than 10% of the equity interests of RTC.
Pursuant to the terms and conditions of a stock purchase agreement, RTC will acquire all operations and assets of Midstate Telephone Company, LLC, and Midstate Communications, Inc. In their application, the parties claim the transaction: will enable economies of scale; strengthen the combined competitive position of the Midstate companies; allow the Midstate companies to leverage RTC’s financial, technical, and managerial resources; help the Midstate companies compete effectively in the telecommunications marketplace; will be seamless for consumers; and is not expected to result in any discontinuance or impairment of the Midstate companies’ existing services.
Mergers & Acquisitions: Saturn Acquisition Company Purchasing Stratus Networks
November 9, 2021 – The FCC’s Wireline Competition Bureau is seeking comment on a Section 214 application filed by Stratus Networks, Inc. and Saturn Acquisition Company, Inc. requesting consent to transfer control of Stratus to Saturn. Comments are due on or before November 23, 2021. Reply comments are due November 30, 2021.
Stratus is an Illinois corporation that offers competitive long distance, VoIP, private line, data and Internet access services in approximately 35 states.
Saturn is a Delaware corporation that does not itself offer domestic telecommunications services but is affiliated with Horizon Telecom, Inc., an Ohio corporation and telecommunications holding company that owns the Chillicothe Telephone Company. Saturn is indirectly wholly-owned by Saturn Networks Holdings, Inc., a Delaware corporation, which, in turn, is owned by the following three U.S. entities: Novacap Saturn Holdings, L.P. (58.4%); John D. Petrakis Dynasty Trust (20.8%); and Kevin Morgan Generational Trust (20.8%).
Pursuant to the terms and conditions of a purchase agreement, Saturn will acquire 100% of the outstanding shares and membership interests in Stratus. Following consummation of the proposed transaction, Stratus “will continue to operate in the same service territories, and will in the immediate future continue to provide services to its customers under the same rates and on the same terms and conditions…as it currently does today.” The parties do not plan “to transfer any of [Stratus’] customers to a new carrier or to change any customer service or billing contact information as a result of the transaction.”
Mergers & Acquisitions: ITC Broadband Operating, LLC Acquiring Aspire Networks 1, LLC (Michigan)
November 5, 2021 – The FCC’s Wireline Competition Bureau is seeking comment on a Section 214 application requesting the transfer of control of Aspire Networks 1, LLC, an indirect, wholly owned subsidiary of Atlantic Engineering Group, Inc. (AEG), to ITC Broadband Operating, LLC. Comments are due on or before November 19, 2021. Reply comments are due November 26, 2021.
Aspire is a Delaware LLC that is authorized as a competitive local exchange carrier (LEC) and eligible telecommunications carrier in Michigan. AEG is a Georgia corporation that is the ultimate parent company of Aspire. AEG is part of a consortium that participated in and won support to provide service to 48,449 locations in Michigan through the Rural Digital Opportunity Fund (RDOF) Phase I Auction. The consortium assigned those winning RDOF bids to Aspire.
ITC Operating is a Delaware LLC investment entity owned by ITC Broadband Holdings, LLC, a U.S. entity. ITC Operating is affiliated with incumbent LEC and other telecommunications service providers in Colorado, Georgia, Kansas, Nebraska, and Texas.
Pursuant to the terms and conditions of a June 2021 contribution agreement, ITC Operating will acquire 100% of the membership interests in Aspire from AEG. The parties claim “the transaction will result in a significant infusion of capital resources into Aspire, which will enhance the company’s ability to accelerate deployment of high-speed broadband services to customers in Michigan.” The parties are seeking to consummate the transaction promptly after Aspire is authorized for RDOF support by the FCC.
Mergers & Acquisitions: Telapex, Inc. Acquiring Troy Cable & Union Springs Telephone Company, Inc. (Alabama)
November 4, 2021 – The FCC’s Wireline Competition Bureau is seeking comment on a Section 214 application filed by Troy Cablevision, Inc., d/b/a Troy Cable, Union Springs Telephone Company, Inc., and Telapex, Inc. requesting consent to transfer control of Troy Cable and Union Springs to Telapex. Comments are due on or before November 18, 2021, and reply comments are due November 26, 2021.
Troy Cable is an Alabama competitive local exchange carrier that provides video and other communications services in south central Alabama. It won Rural Digital Opportunity Fund (RDOF) Phase I Auction support. Union Springs is a wholly-owned subsidiary of Troy Cable that provides incumbent LEC services in Bullock County, Alabama. Telapex is a Mississippi holding corporation that provides telecommunications services through various wholly-owned subsidiaries.
Pursuant to a stock purchase agreement, Telepak Networks, Inc., a wholly owned subsidiary of Telapex, will purchase all of the issued and outstanding stock of Troy Cable, which owns all of the issued and outstanding stock of Union Springs. Following consummation, Troy Cable will continue to wholly-own Union Springs, and both Troy Cable and Union Springs will become indirect wholly-owned subsidiaries of Telapex. The parties claim the proposed transaction will promote the public interest by enabling Telapex to expand its offerings and services to a broader customer base, and the transaction “will be seamless to consumers and will not result in any discontinuance or impairment of either Troy Cable or [Union Springs] service offerings.”
Mergers & Acquisitions: Amherst Telephone Company Purchasing Union Telephone Company (Wisconsin) & Union Information Systems
November 4, 2021 – The FCC’s Wireline Competition Bureau is seeking comment on a Section 214 application filed by Union Telephone Company and Amherst Telephone Company requesting consent to transfer control of Union Telephone and its wholly owned subsidiary, Union Information Systems, LLC, to Amherst. Comments are due on or before November 18, 2021, and reply comments are due November 26, 2021.
Union Telephone is a Wisconsin Corporation that provides telecommunications services to approximately 2,164 access lines as an incumbent local exchange carrier (LEC) in the Plainfield, Hancock, Coloma, and Almond exchanges in portions of Waushara, Portage, Adams, and Marquette Counties in central Wisconsin. Union Telephone receives Alternative Connect America Cost Model (A-CAM) I support in its only study area. Union Information Systems is a Wisconsin LLC that provides resold domestic and IP television services to customers in and around Union Telephone's local exchange service area.
Amherst is a Wisconsin corporation that provides telecommunications services to approximately 4,400 access lines as an incumbent LEC in the Amherst, Polonia, and Rosholt exchanges in portions of Portage, Marathon, and Waupaca Counties in central Wisconsin. Amherst is an average schedule company that receives A-CAM II support in its only study area. Parts of Union Telephone’s Almond exchange and Amherst’s Amherst exchange are adjacent to one another.
Pursuant to the terms and conditions of the proposed transaction, Amherst will purchase 100% of the issued and outstanding common stock of Union Telephone, which will make Union Telephone and Union Information Systems wholly-owned subsidiaries of Amherst.
Mergers & Acquisitions: MetroNet Systems Holdings Acquiring CTS Communications Corporation & Climax Telephone Company (Michigan)
October 13, 2021 – The FCC’s Wireline Competition Bureau is seeking comment on a Section 214 application filed by MetroNet Systems Holdings, LLC, CTS Communications Corporation, and Climax Telephone Company requesting consent for MetroNet Systems Holdings to acquire ownership and control of CTS Communications Corporation and indirect ownership of Climax. Comments are due on or before October 27, 2021. Reply comments are due November 3, 2021.
MetroNet Systems Holdings, LLC is a Delaware LLC, and a direct, wholly-owned subsidiary of Metronet Holdings, LLC. Metronet Holdings, through its direct and indirect, wholly-owned subsidiaries, provides domestic and international telecommunications services, VoIP services, broadband services, and multichannel video programming services in certain portions of Florida, Indiana, Illinois, Iowa, Kentucky, Michigan, Minnesota, Missouri, North Carolina, Ohio, Virginia and Wisconsin.
Climax Telephone Company is a Michigan corporation that provides service as an incumbent local exchange carrier (LEC) in Climax, Michigan and as a competitive LEC in the Kalamazoo, Galesburg, Scotts, and Battle Creek exchanges in Michigan. Climax is a direct, wholly-owned subsidiary of CTS Communications Corporation, a Michigan holding company.
Pursuant to the terms and conditions of a stock purchase agreement, MetroNet Systems Holdings will acquire all the outstanding capital stock of CTS Communications Corporation. Following consummation, CTS Communications Corporation will be a direct, wholly-owned subsidiary of MetroNet Systems Holdings, and Climax will be an indirect, wholly-owned subsidiary of MetroNet Systems Holdings.
Mergers & Acquisitions: Hilliary Acquisition Oklahoma Purchasing Southwest Oklahoma Telephone Company
October 13, 2021 – The FCC’s Wireline Competition Bureau is seeking comment on a Section 214 application filed by Southwest Oklahoma Telephone Company (SWOT) and Hilliary Acquisition Oklahoma, LLC requesting consent to transfer control of SWOT to Hilliary. Comments are due on or before October 27 2021, and reply comments are due November 3, 2021.
SWOT provides service as an incumbent local exchange carrier (LEC) in the counties of Harmon, Greer, and Jackson, Oklahoma.
Hilliary Acquisition Oklahoma, LLC is an Oklahoma holding company in Lawton, Oklahoma that was formed to acquire SWOT. Hilliary Acquisition, and its members, directly or indirectly, hold ownership interests in the following entities that provide local exchange and domestic interexchange services in Oklahoma: (1) Medicine Park Telephone Company, Inc.; (2) Oklahoma Western Telephone Company, Inc.; (3) Phoenix Long Distance, Inc.; (4) Wichita Online, LLC; (5) Southern Plains Cable, LLC; and (6) Texhoma Fiber, LLC.
Pursuant to a stock purchase agreement, Hilliary Acquisition will purchase all 6,433 outstanding shares of SWOT. Upon consummation of the proposed transaction, SWOT will be a wholly-owned subsidiary of Hilliary, and SWOT’s subsidiary, Southwest Oklahoma Telecommunications, Inc. d/b/a Southwest Oklahoma Internet, will continue to be a wholly-owned subsidiary of SWOT.
Mergers & Acquisitions: Verizon Wireless Buying Chariton Valley’s LTE Network & Various Spectrum Licenses
October 1, 2021 – Verizon Wireless has entered into an agreement to purchase Chariton Valley Communications Corporation’s LTE wireless network and various FCC spectrum licenses in Missouri. The Description Of Transaction And Public Interest Statement accompanying the application filed with the FCC by Chariton Valley contains the following information on the transaction:
The proposed transaction includes the assignment of the identified licenses and the LTE operating network, including LTE network assets and facilities, associated with the Licenses in two CMAs in Missouri covered by the Licenses. Verizon Wireless does not currently offer wireless service within either of the CMAs in this transaction. The proposed transaction will expand Verizon Wireless’s coverage and service into markets that Verizon Wireless does not currently serve. The proposed transaction also will provide Verizon Wireless with additional spectrum capacity, which will help it to meet future demands of its customers for broadband wireless services in the Markets.
Chariton Valley’s customers will be given advance notice of the proposed transaction. Chariton Valley will advise its approximately 7,300 customers of the sale to Verizon Wireless in the affected markets and release its customers from their service contracts. Customers will be informed they may obtain service from Verizon Wireless or other available wireless service providers. Specifically, Chariton Valley will advise its customers via both a letter to the customer’s address of record and updates to Chariton Valley’s website of the sale to Verizon Wireless.
Mergers & Acquisitions: Great Plains Communications Acquires USA Communications
October 1, 2021 – Great Plains Communications has announced it has acquired USA Communications. The deal is Great Plains’ fourth acquisition in the past five years. Great Plains is a “telecommunications provider with a growing, privately-owned 13,500+ mile fiber network touching 13 states,” and is subsidiary of Grain Management, LLC. USA Communications provides fiber-based communications services in Nebraska and Colorado. According to the press release, the two companies entered into a definitive agreement in the third quarter of 2021, and the acquisition was completed on September 30, 2021. Terms were not disclosed.
Mergers & Acquisitions: Middle Point Home Telephone Company Purchasing Consolidated Communications’ Ohio Assets
September 24, 2021 – Consolidated Communications Holdings, Inc. has announced it will sell its Ohio assets to Middle Point Home Telephone Company. According to the company’s press release, “Consolidated’s Ohio operations contributed approximately $9 million of revenue in fiscal 2020 and includes approximately 4,000 access lines and 3,900 Internet connections.” The deal is subject to customary regulatory approvals, and is expected to be completed by the end of 2021.
