The statewide internet and phone service provider FairPoint Communications has completed its sale to the Illinois-based Consolidated Communications, in a deal that more than doubles Consolidated’s fiber-optic cable network.
Consolidated announced on Monday that it closed the deal announced in December, valued at $1.3 billion.
The deal makes Consolidated the ninth-largest fiber-optic network operator in the country, the company said, and it expects the combined company will cut annual operating costs by about $55 million.
[What FairPoint’s sale means to Maine customers]
It will also require Consolidated to invest $52.2 million in the company’s networks over three years, a condition negotiated by the Maine Office of the Public Advocate and approved by regulators.
Regulators also approved letting the company use its Maine properties as security against a $935 million loan, refinancing $915 million of FairPoint’s debt at better interest rates. Regulators and the companies said the deal puts the combined company on firmer financial footing.
FairPoint stockholders get 0.73 shares of Consolidated stock for each of their FairPoint shares, with cash payments for any fractional shares.
Consolidated said it plans to expand some of its products to FairPoint’s service area, including cloud services and “other broadband enhancements.”
The close of the deal ends a few tough years after the company emerged from bankruptcy in 2011 to experience the longest worker strike of 2014 and have ongoing trouble meeting landline service quality requirements set by regulators.
The company agreed to make $185,000 in landline investments in order to settle complaints over those missed service quality benchmarks.
After cutting employees and winning concessions from its unions, it closed 2015 with the first profitable year since its bankruptcy reorganization, an achievement driven by lower operating costs and focusing on the high-capacity broadband internet service and fiber-optic connections to cell towers that attracted Consolidated.
The combined company has around 4,400 employees across 24 states, with about 980 of those jobs in Maine.