FCC Approves Sale of Consolidated Communications to PE Firms
Searchlight Capital and BCI aim to take the ISP private for $3.1 billion.
Jake Neenan
WASHINGTON, Dec. 9, 2024 – The Federal Communications Commission approved Monday the $3.1 billion purchase of Consolidated Communications to two private equity firms.
Searchlight Capital and Canadian firm British Columbia Investment have the agency’s greenlight to take Consolidated private. The ISP has nearly 400,000 broadband subscribers in the US and with nearly 250,000 fiber customers, making it one of the country’s largest fiber providers.
The companies plan to fully close the deal by early 2025 and say they have received approval from all state utility regulators in Consolidated's footprint. Searchlight is set to own 77.2 percent equity in Consolidated, with BCI controlling the remaining 22.8 percent.
The deal cleared last month a review by federal law enforcement officials, spurred by the foreign ownership of Searchlight and BCI. The former’s beneficial owners include Eric Zinterhofer, a US citizen, Erol Uzumeri, a UK and Canadian dual citizen, and Oliver Haarmann, a German citizen. Ajit Pai, former chairman of the FCC during the first Trump administration, is also a partner at Searchlight.
A committee of top officials from the departments of Justice, Defense, and Homeland Security approved the deal on the condition that the companies would agree to reporting requirements and third-party audits at the agencies’ discretion, among other things.
The FCC’s approval, handed down by the Wireline Competition Bureau (WCB), was also conditioned on Searchlight and BCI keeping those terms.
All three companies had asked the FCC last month for an approval before Dec. 19, arguing in a November meeting with agency staff that “closing the transaction by the end of 2024 will provide significant cost savings that will permit [Consolidated] to fully focus its financial resources on continuing the company’s fiber expansion strategy.”
The deal is facing a Delaware Chancery Court lawsuit in which Consolidated stockholders alleged the board hid conflicts of interest and took a too-low offer from Searchlight. Searchlight was already a controlling investor in Consolidated. After a series of extensions, the ISP has until December 18 to respond.
The foreign ownership committee is also reviewing T-Mobile’s bid to purchase UScellular – the former is owned by German telecom company Deutsche Telekom. T-Mobile is also in the process of acquiring fiber broadband provider Lumos.
