Consolidated Communications gets $140 million bridge loan commitment

By Sara Rosenberg

New York, June 30 – Consolidated Communications Inc., a wholly owned subsidiary or Consolidated Communications Holdings Inc., has received a commitment for a $140 million one-year senior unsecured bridge loan in connection with its acquisition of Enventis Corp., according to an 8-K filed with the Securities and Exchange Commission on Monday.

The company intends to replace the bridge loan with the issuance of senior unsecured notes, the filing said.

Pricing on the bridge loan is 10 7/8%, payable semi-annually in arrears on June 1 and Dec. 1 of each year.

Morgan Stanley Senior Funding Inc., Wells Fargo Securities LLC and RBS Securities Inc. are the lead banks on the debt.

Under the agreement, Enventis is being bought in an all-stock transaction valued at about $350 million. Enventis shareholders will receive a fixed exchange ratio of 0.7402 shares of Consolidated Communications common stock for each share of Enventis common stock they own.

Proceeds from the new debt will be used to refinance existing Enventis debt and for fees and expenses.

On a pro forma basis, the combination results in a company with about $785 million in revenue and $332 million in adjusted EBITDA (before synergies) for the 12 months ending March 31.

Pro forma net leverage is 4 times before synergies and 3.8 times after synergies.

Closing is expected in the fourth quarter, subject to federal and state regulatory approvals and the approval of both Consolidated Communications’ and Enventis’ shareholders.

Consolidated Communications is a Mattoon, Ill.-based provider of advanced communications services. Enventis is a Mankato, Minn.-based operator of a next-generation fiber network.

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