Kentucky-based CLEC Lightyear Networks Solutions, taking on its second acquisition this year, is buying bankrupt SouthEast Telephone Inc. in a deal that adds about 33,000 rural customers to its rosters.
SouthEast also is headquartered in Kentucky.
Lightyear plans to purchase SouthEasts assets, including vendor contracts and intellectual property, with cash, stock and debt. The cash will total up to $560,000, plus $4,000 for each SouthEast employee Lightyear doesnt hire; the stock will amount to 200,000 shares worth .001 each; and debt will come to about $3.8 million plus $2 million for working capital and network expansion.
Those terms are not guaranteed, however, as a bankruptcy court must first approve the details. A hearing is scheduled for July 16. Lightyear Chairman and CEO Sherman J. Henderson doesnt anticipate any problems.
If there are any obstacles, I would be surprised, but you cant tell in bankruptcy until you get there, Henderson said.
If all goes as intended, Lightyear will bring on thousands of SouthEast subscribers. The hope is those users, most of whom still have landlines, will sign up for Lightyears broader array of services.
This is a real opportunity to take ourproducts to that marketplace, said Henderson. The customers in rural America are very loyal to a company like SouthEast and we believe that will continue.
The Lightyear-SouthEast deal looks to benefit SouthEast’s agent base the most. Thats because few of Lightyears agents target rural America.
Its such a confined marketplace, Henderson said.
What the Lightyear-SouthEast transaction does do for agents, outside of Kentucky and on a larger scale, is forge a larger CLEC last year, SouthEast reported around $37.5 million in revenue.
Lightyear expects to close the SouthEast takeover by Oct. 1. Shares of Lightyear were trading at the companys all-time high of $6 on Tuesday. Lightyear went public in February after conducting a reverse merger with Libra Alliance Corp., a shell corporation and former ISP.
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April 19 2018 @ 21:50:05 UTC