Enventis Corporation To Merge With Consolidated Communications

Consolidated Communications Holdings, Inc.

and Enventis Corporation

, formerly HickoryTech, announced that each of their respective Boards of Directors have approved a definitive agreement for Enventis to merge with Consolidated Communications. This agreement is an all-stock transaction in which Consolidated Communications will acquire 100 percent of Enventis' 13.8 million (fully diluted) shares outstanding in a transaction valued at approximately $350 million. Under the terms of the agreement, Enventis shareholders will receive a fixed exchange ratio of 0.7402 shares of CNSL common stock for each share of ENVE common stock they own. Based on the closing price of CNSL on June 27, 2014, the consideration represents $16.50 per share for each ENVE share outstanding equating to a premium of 17.4 percent over the ENVE closing price on June 27, 2014 or 27.2 percent over the past 90-day average share price. Consolidated Communications is maintaining its current annual dividend policy of approximately $1.55 per share, which it has consistently paid since its initial public offering in 2005. On a pro forma basis, the strategic combination results in a company with approximately $785 million in revenue and $332 million in adjusted EBITDA (before synergies) for the 12 months ending March 31, 2014. The additional markets strengthen the combined company's growth opportunities, enhancing the scale with a fiber-rich network that extends across 11 states. Together, Consolidated Communications and Enventis will expand upon the strong reputations each has built with its customers and in the communities they serve. "This transaction combines two companies with similar strategies and cultures, resulting in a financially strong company with a robust balance sheet and attractive dividend payout ratio," said Bob Currey, Consolidated Communication's Chairman and Chief Executive Officer. "Enventis has built a strong business delivering competitive business and broadband services over a 4,200 route mile fiber network. The combination and additional markets creates a broader platform from which to grow and expand. We look forward to working with the Enventis team to grow the business." "For more than a century, both Consolidated Communications and Enventis have shared a strong commitment to deliver the highest quality products and services to their customers while maintaining strong ties to the communities they serve," said John Finke, President and Chief Executive Officer of Enventis. "This combination creates a highly competitive company with added scale, expertise and the ability to provide best-in-class, quality communication products and services. We believe the transaction is in the best long-term interests of our company and our stakeholders." Enventis is headquartered in Mankato, Minnesota and operates a next-generation fiber network spanning 4,200 route miles that enables facilities-based operations in Minnesota and into Iowa, North Dakota, South Dakota and Wisconsin. It has over 500 employees and has transformed itself with approximately 80 percent of revenues coming from its business and broadband services. The company has grown both revenue and EBITDA at a compound annual growth rate of approximately five percent since 2006. Enventis currently serves approximately 39,000 access lines, 21,000 high-speed internet customers, 12,000 digital TV customers and 90 fiber-to-the tower sites. The business operates six data centers and has a full suite of business communication and IT services including its recent launch of new and expanded cloud and managed services. At the end of the first quarter 2014, Enventis had net debt of approximately $123 million with a leverage ratio of 2.8x debt to EBITDA. Consolidated Communications has received committed debt financing in conjunction with the acquisition. The transaction is expected to generate annual operating synergies of approximately $14.0 million, which are expected to be achieved on a run-rate basis by the end of the second year after close. Consolidated Communications expects to incur merger and integration costs, excluding closing costs, of approximately $17.4 million in operating expenses and $5.2 million in capital expenses over the first two years following closing. The merger is subject to standard closing conditions including federal and state regulatory approvals and the approval of both Consolidated Communications' and Enventis' shareholders. The merger is expected to close in the fourth quarter 2014. Wells Fargo Securities, LLC acted as financial advisor on the transaction and rendered a fairness opinion to the Board of Directors of Consolidated Communications. Schiff Hardin LLP acted as legal advisor to Consolidated Communications. Waller Capital Securities, LLC acted as financial advisor to Enventis and rendered a fairness opinion to the Board of Directors of Enventis. Stinson Leonard Street LLP acted as legal advisor to Enventis. Teleconference and Webcast Information Consolidated Communications will host a conference call today at 11:30 a.m. Eastern Time / 10:30 a.m. Central Time to discuss the merger. The call is being webcast and archived on the "Investor Relations" section of Consolidated Communication's website at www.consolidated.com. If you do not have internet access, the conference call dial-in number is 877-374-3981 with pass code 68422245. International parties can access the call by dialing 678-809-1540. A telephonic replay of the conference call will also be available starting three hours after completion of the call until July 7, 2014 at midnight Eastern Time. To hear the replay, parties in the United States and Canada should call 855-859-2056 and international parties should call 404-537-3406.