ATN to Acquire Innovative Group of Companies
October 01 2015 - 7:31AM
- Combination adds Wireline Video, Broadband, and Voice
Services to ATN's existing Mobile Service in the U.S. Virgin
Islands
ATN (Nasdaq:ATNI) today announced it has entered into an agreement
to acquire all of the membership interests of Caribbean Assets
Holdings LLC, the holding company for the Innovative group of
companies operating cable TV, Internet and landline services
primarily in the U.S. Virgin Islands ("Innovative") from the
National Rural Utilities Cooperative Finance Corporation ("CFC").
ATN will purchase the Innovative operations for a purchase price of
approximately $145 million, subject to certain purchase price
adjustments, with $85 million payable in cash and the option to
finance the remaining $60 million of the purchase price with a loan
from an affiliate of CFC, the Rural Telephone Finance Cooperative.
With the purchase, ATN's current operations in the U.S. Virgin
Islands under the "Choice" name will be combined with Innovative to
deliver residential and business subscribers a full range of
telecommunications and media services. Subject to customary closing
terms and conditions, the Company currently expects to complete the
transaction in mid-2016.
"This transaction is aligned with our strategy of building out
our service offerings in geographies where we see the potential to
create long term value," said ATN Chief Executive Officer, Michael
Prior. "ATN's Choice subsidiary has been providing a variety of
telecommunications services in the U.S. Virgin Islands for the past
16 years, and it is a market we know well. With this acquisition,
we will have a strong foundation for delivering a high quality,
comprehensive range of residential and business services. While CFC
has made substantial investments and improvements in Innovative
since taking ownership, the company has been operating at a loss
for a number of years. Our goal is to use our deep local roots,
significant investment capability and decades of telecom operating
experience to deliver services to customers at a great value and
with a superior customer experience, and all of our employees will
be completely focused on that mission. We embrace the challenge of
continuing and expanding on CFC's progress and returning this
business to profitability."
ATN is also acquiring Innovative's smaller cable TV operations
in the British Virgin Islands and St. Maarten as part of the
transaction. For its most recently completed fiscal year, ended May
31, 2015, Innovative's company-wide operations had approximately
$100 million in revenue. ATN expects the combined company to have
aggregate annual revenues of around $110 million and initial EBITDA
margins between 20% and 25% for the first full year of operations
(excluding one-time integration and transactional expenses).
Subject to an ongoing review of asset values and the application of
purchase accounting, the Company currently expects the transaction
to be modestly accretive to net income for the first full year
following close.
The agreement is subject to customary closing terms and
conditions, the expiration of the Hart-Scott Rodino waiting period
and the receipt of approvals from the Federal Communications
Commission and regulatory authorities in the U.S. and British
Virgin Islands and St. Maarten.
Q Advisors, LLC served as financial advisor to ATN, and
Mintz Levin Cohn Ferris Glovsky and Popeo, PC and Wilkinson Barker
Knauer, LLP are acting as legal counsel.
About ATN
Atlantic Tele-Network, Inc. (Nasdaq:ATNI), headquartered
in Beverly, Massachusetts, provides telecommunications
services to rural, niche and other under-served markets and
geographies in the United States, Bermuda and
the Caribbean and owns and operates solar power systems
in select locations in the United States. Through our
operating subsidiaries, we (i) provide both wireless and wireline
connectivity to residential and business customers, including a
range of mobile wireless solutions, local exchange services and
broadband internet services, (ii) provide distributed solar
electric power to corporate, utility and municipal customers and
(iii) are the owner and operator of terrestrial and submarine fiber
optic transport systems. For more information, please
visit www.atni.com.
Cautionary Language Concerning Forward Looking
Statements
This press release contains forward-looking statements relating
to, among other matters, our future financial performance and
results of operations; the competitive environment in our key
markets, demand for our services and industry trends; the outcome
of regulatory matters; the pace of our network expansion and
improvement, including our level of estimated future capital
expenditures and our realization of the benefits of these
investments; and management's plans and strategy for the future.
These forward-looking statements are based on estimates,
projections, beliefs, and assumptions and are not guarantees of
future events or results. Actual future events and results
could differ materially from the events and results indicated in
these statements as a result of many factors, including, among
others, (i) our ability to receive the requisite regulatory
consents and approvals to consummate the transaction; (ii) the
satisfaction of the other conditions to completion of the
transaction; (iii) the performance of the acquired business;
(iv) our ability to operate in a new industry; (v) our ability to
integrate the new business into our current operations; (vi)
increased competition; (vii) changes in laws and government
regulations affecting the acquired business; and the risk factors
set forth in our Annual Report on Form 10-K for the year
ended December 31, 2014, filed with the SEC on March
16, 2015 and the other reports we file from time to time with
the SEC. The information set forth in this news release speaks
only as of the date hereof, and ATN disclaims any intention or
obligation to update any forward-looking statements as a result of
developments occurring after the date of this news release.
CONTACT: Michael T. Prior
Chief Executive Officer
978-619-1300
Justin D. Benincasa
Chief Financial Officer
978-619-1300
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