ATN outbids private equity to take Alaska Comms for $332m
US telecoms group ATN International has beat private equity investors to buy Alaska Communications.
Massachusetts-based ATN put in an all-cash agreed bid of US$332 million for the company, beating a previous offer from Macquarie Capital and GCM Grosvenor, worth just $300 million.
ATN will acquire the Alaska company in association with its financial partner, Freedom 3 Capital, the company announced yesterday. ATN said it will operate and consolidate the new entity and Alaska Communications through its majority ownership stake.
Michael Prior, chairman and CEO of ATN, said: “This investment and merger allows us to enter a new market with many similar characteristics to our existing operations in the US and elsewhere. Further, it aligns with our strategy to leverage the broad capabilities of our operating platform to enhance and augment leading providers of facilities-based communications services in distinctive markets.”
In a conference call after the deal was announced, Prior said: “We are enthusiastic about the prospect of entering this new domestic market and working together with the Alaska Communications team to provide industry-leading products and services to customers. We view Alaska Communications, and the nature of this transaction, as an excellent strategic fit for ATN.”
ATN’s existing investments include rural US wireless company Commnet, business operator Choice Wireless and Choice Broadband, as well as in-building wireless company Geoverse. Its investments include Guyanese incumbent operator GT&T and Australian infrastructure company Stilmark.
Prior said: “ATN has a long history of enabling its subsidiaries to gain and maintain strong market positions by investing in high quality infrastructure, the latest technologies and creative solutions to give customers a superior experience.”
In the conference call he said: “Alaska Communications employs approximately 600 people and operates over 157,000 miles of fibre network, has approximately 7,000 fibre to the home locations, and nearly 900 fibre-fed commercial and government buildings.”
Alaska Communications president and CEO Bill Bishop, who took over in 2019, welcomed the deal as “an exciting opportunity”. He said: “ATN has extensive telecommunications expertise, a strong track record of successfully investing in and operating capital-intensive businesses and has a strong financial position highlighted by its net cash position.”
In November Bishop had welcomed the proposed Macquarie/GCM deal with similar enthusiasm. It represented “an exciting opportunity to enhance our financial position and expand our resources to better serve our customers”, he said then.
Macquarie and GCM would have taken Alaska Communications private. ATN is Nasdaq-listed, but Alaska Communications would be a private company after the deal closes, expected in the second half of the year.
ATN’s market cap is $708 million, implying the Alaska deal will represent a significant increase in its valuation.
ATN said the transaction has fully committed debt and equity financing and is not subject to any condition with regard to financing. It is, of course, subject to the approval of Alaska Communications’ stockholders, regulatory approvals and other customary closing conditions.