“The telecommunications industry is consolidating, and we’re consolidating what we consider the smaller end of the market,” said Curtis Garner, cfo in Oneonta, Ala. The acquisitions will make the company the 25th largest out of roughly 1,000 telecom businesses. “The good news is that it puts us near the top. But even with the new lines, we’ll still be significantly smaller than even the 10th largest company.”
The company received financing commitments in May, but the acquisition was held up by negotiations between Otelco and Country Road. Otelco officially announced the acquisition of the properties – located in West Virginia, Massachusetts and Maine – in August. The transaction was completed after regulatory approval was landed from the Maine Public Utility Commission on Oct. 29.
The facility replaces a former $80 million facility that was put in place in 2004 and refinanced in 2006. The new loan is priced on a grid, based on the amount of senior leverage. Pricing on the $15 million revolver and $173.5 million term loan runs between LIBOR plus 3 1/2-4 1/4%; the old facility was priced at LIBOR plus 1 1/2-2 1/2%. “We brought it down to [LIBOR plus] 2 when we brought leverage down,” Garner said. “And that was at a time when the market was grasping to put money wherever they could put it.”
