Investment firms Macquarie Capital and GCM Grosvenor said they have agreed to purchase Alaska Communications Systems Group for $300 million in cash and assumed debt, a deal that will also result in the publicly traded telecom provider going private.
Alaska Communications provides broadband and IT management services to business and residential customers throughout the state. As part of the deal. Macquarie and Grosvenor have agreed to pay $3 per share in cash (a 57% premium to its stock price on Nov. 2) for Alaska Communications outstanding shares and assume about $150 million in debt. The deal is expected to be closed in the second half of 2021.
"After carefully evaluating Macquarie Capital’s and GCM’s offer, we are confident that this transaction is in the best interest of Alaska Communications and its stockholders,” said Alaska Communications chairman David Karp in a press release. “Macquarie Capital has a proven track record of delivering large and complex transactions globally on accelerated timelines, and GCM’s Labor Impact Fund provides strategy driven capital that we expect will generate real value for our customers and the Alaska Communications workforce."
Macquarie has been active in snapping up broadband and fiber providers. In March it agreed to purchase Cincinnati Bell in a deal valued at $2.9 billion. GCM Grosvenor is a private investment firm with about $57 billion in assets under management.
According to its Q2 financial statements, Alaska Communications has about 47,000 residential and business broadband customers across the state, and about 100,000 digital subscriber line customers. Earlier this year it said it would build out fiber service to underserved communities in the state funded in part by the federal Connect America Fund II.
“Macquarie Capital has extensive experience navigating the complexities and issues associated with public-to-private transactions, as well as addressing the various regulatory regimes associated with communications infrastructure transactions,” Alaska Communications CEO Bill Bishop said in a press release. “It also has deep telecommunications expertise and a strong track record of investing in capital intensive businesses, which will be critical as we deliver on our strategy to utilize our superior customer service and fiber-based network solutions in providing industry-leading telecommunications products and services. Finally, GCM’s Labor Impact Fund provides strategic value to our business both through its experience in the telecommunications sector and in fostering partnerships with a unionized workforce. We firmly believe this transaction will allow us to enhance our expanded fiber network services and drive long-term value for our customers in Alaska and the Lower 48."
The deal is subject to shareholder approval. Alaska Communications’ board of directors has already unanimously approved the transaction, although it retains the right to solicit better offers from third parties until Dec. 3. TAR Holdings, LLC, which owns 8.8% of Alaska Communications’ outstanding stock, has entered into a voting agreement with Macquarie and GCM, among other things, to vote in favor of the merger.
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