Oak Hill Capital to buy Otelco for USD105.6m

28 Jul 2020

US regional operator Otelco has entered into a definitive agreement to be acquired by affiliates formed by private equity firm Oak Hill Capital. The deal is valued at USD11.75 per share in cash, which represents an equity purchase price of USD40.6 million and an enterprise value of USD105.6 million. As part of the agreement, Oak Hill will assume or refinance Otelco’s outstanding debt. The offer represents a 58.1% premium to Otelco’s average daily closing stock price during the second quarter of 2020.

Otelco’s Board of Directors approved and declared advisable the merger agreement; the telco’s largest shareholders are a group of related entities, which collectively own 49.6% of the company’s outstanding shares and have agreed to vote in favour of the transaction. The takeover is not subject to financing contingencies and is expected to close in the fourth quarter of 2020.

TeleGeography notes that Otelco provides fixed line telecoms services in Alabama, Maine, Massachusetts, Missouri, New Hampshire, Vermont and West Virginia. Otelco operates eleven incumbent telephone companies serving rural markets, or rural local exchange carriers. The company says it currently serves more than 33,000 customers.

United States, Otelco