Source: Benzinga

OTELCO: Otelco Agrees to be Acquired by Oak Hill Capital

ONEONTA, Ala., July 27, 2020 (GLOBE NEWSWIRE) -- Otelco Inc. (NASDAQ:OTEL) ("Otelco" or the "Company"), a wireline telecommunication services provider in Alabama, Maine, Massachusetts, Missouri, New Hampshire, Vermont and West Virginia, announced today that it has entered into a definitive agreement to be acquired by affiliates formed by Oak Hill Capital ("Oak Hill"), a private equity firm, for $11.75 per share in cash, which represents an equity purchase price of $40.6 million and an enterprise value of $105.6 million. As part of the definitive agreement, Oak Hill will assume or refinance Otelco's outstanding debt. The consideration represents a 43.3% premium to the unaffected share price of Otelco as of June 23, 2020, a 53.2% premium to the 20-Day Volume Weighted Average Price as of the same date, and a 58.1% premium to Otelco's average daily closing stock price during the second quarter of 2020.Otelco's Board of Directors approved and declared advisable the merger agreement, and Otelco's Board of Directors recommended the approval and adoption of the merger agreement by the holders of shares of Otelco common stock. A special meeting of Otelco's shareholders will be held as soon as practicable after the filing of a definitive proxy statement with the U.S. Securities and Exchange Commission ("SEC") and subsequent mailing to shareholders. The mailing of the proxy statement is expected to take place following the expiration of a 30-day 'go-shop' period, during which Otelco is permitted to encourage and solicit alternative proposals from third parties.The transaction is not subject to financing contingencies and is expected to close in the fourth quarter of 2020. The agreement is subject to Otelco shareholder approval, as well as other regulatory and customary closing conditions. Otelco's largest shareholders are a group of related entities, which collectively own 49.6% of the Company's outstanding shares and have agreed to vote in favor of the transaction."Like much of the telecommunications industry, Otelco is rapidly deploying technology, including fiber to the premise, to increase internet speeds for our customers," commented Richard Clark, President and CEO of Otelco. "We have invested in fiber network construction over the last several years in response to the demand for higher bandwidth and have demonstrated our ability to deliver the necessary technology. Oak Hill has invested capital in other telecommunications providers to advance the deployment of the technology needed to support up to one gigabit ...Full story available on

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Richard A. Clark's photo - President & CEO of Otelco

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Richard A. Clark

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OTELCO is a telecommunication company that provides voice and data connectivity solutions for individuals and businesses. Read more