The US Federal Communications Commission (FCC) has confirmed that its International Bureau has granted permission for private equity firm Searchlight Capital to acquire a greater than 25% interest in Consolidated Communications. The added scrutiny appears to be a result of Searchlight’s indirect multinational shareholder structure.
As per FCC documentation, Searchlight Capital Partners III GP – one of the holding companies involved in the transaction – is based in the Cayman Islands, while other shareholders hold German and Canadian citizenship. The watchdog noted: ‘After a review of the Petition and record in this proceeding, we find that the public interest would not be served by prohibiting the foreign ownership of Consolidated Communications Holdings’.
According to TeleGeography’s GlobalComms Database, in September 2020 Searchlight agreed to invest USD425 million in Consolidated Communications, in a move that will ultimately help it to secure a 34.55% voting stake in the telco (49.21% equity stake). The investment has been structured in two stages; at the closing of the first stage (2 October 2020) Searchlight invested USD350 million in the regional telco.