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Consolidated Communications Completes Acquisition of SureWest

Mattoon, Il.-based Consolidated Communications Holdings Inc. completed its acquisition of SureWest Communications Monday for approximately $324 million.

Bob Currey, president and CEO of Consolidated, said the transaction brings together Consolidated’s consistent cash flows with SureWest’s growth to create a financially strong company with a robust balance sheet and attractive dividend payout ratio.

“The combined company provides a diverse set of revenues and cash flows across multiple markets resulting in a stronger, more competitive company,” Currey said.

Consolidated Communications is an established rural local exchange company providing voice, data and video services to residential and business customers in Illinois, Texas and Pennsylvania. Through its 100-plus year heritage and sevral acquisitions and mergers, Consolidated has 226,167 ILEC access lines, 89,672 competitive local exchange carrier (CLEC) access line equivalents, 112,368 high-speed internet subscribers, 35,337 IPTV subscribers and 9,569 VoIP lines.

Some of Consolidated’s M&A history include the acquisitions of North Pittsburgh Systems Inc. (NPSI) in July of 2007 for $375.1 million and Dallas-based TXU Communications in April of 2004 for $527 million. But the company, begun as the Mattoon Telephone Company in 1894, began rolling up small companies in 1906. In 1935 it merged with Illinois Southeastern Telephone, which had just rolled up Cole County Telephone and Shelbyville Telephone. In the 60s, it picked up the Effingham exchange from Illinois Bell and some McLeod properties in 1997.

SureWest is an integrated communications provider and the bandwidth leader in the markets it serves. Headquartered in Northern California for more than 95 years, SureWest offers bundled residential and commercial services in the greater Sacramento and Kansas City regions that include IP-based digital and high definition television, high speed internet, Voice over IP, and local and long distance telephone. SureWest was the nation’s first provider to launch residential HDTV over an IP network and offers one of the nation’s fastest symmetrical internet services with speeds of up to 50 Mbps in each direction on its fiber-to-the-home network.

To determine consideration for their stock, record holders of SureWest common stock can elect either a cash election to receive $23 in cash, without interest, for each share of SureWest common stock, or choose a stock election to receive shares of Consolidated common stock having an equivalent value based on average trading prices for the 20-day period ending two days before the closing date of the merger. They also may choose a combination of the two options.

Overall elections were subject to a proration so that 50% of the SureWest shares (treating equity award shares as outstanding shares) will be exchanged for cash and 50% for Consolidated stock.

Both companies sell through channel partners.


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