Oak Hill Capital has completed its acquisition of Otelco Inc. for $11.75 per share or a total equity purchase price of approximately $40.6 million. In addition, as part of the agreement, Oak Hill assumed or refinanced Otelco’s outstanding debt.
Otelco Inc., headquartered in Oneonta in Blount County, is a wireline telecommunications service provider in Alabama, Maine, Massachusetts, Missouri, New Hampshire, Vermont and West Virginia. Oak Hill Capital is a private equity firm that invests in media and communications, services, industrials and consumer sectors.
The acquisition was first announced in late July, 2020, and was approved by Otelco shareholders of common stock.
Oak Hill has invested in other fiber-to-the-premises operators serving residential and business customers. Those current investments are in NetSpeed LLC dba GoNetspeed, which has operations in Pennsylvania and Connecticut, and Lantek Fiber Optic Services Inc., a fiber construction company serving New York, Pennsylvania and Connecticut.
“We are excited to work with Otelco, GoNetspeed and Lantek to expand the availability of fiber-based data services in the communities where the companies operate,” said Scott Baker and Benjamin Diesbach, partners of Oak Hill. “We are thrilled to partner with Richard Clark, who will continue to serve as president and CEO of the combined group of companies, and the rest of the senior management teams to become a leading fiber-to-the-premises operator in the northeastern United States.”
Otelco, over the last several years, has invested heavily in fiber network construction to meet customers’ demands for higher bandwidth. “With the full strategic and financial support of Oak Hill, we are now uniquely positioned to rapidly expand our fiber network investments and provide exciting new capabilities to current and prospective customers and communities,” Clark said of the acquisition.
Trevor Jones, Otelco’s head of marketing and customer operations, and Michael D’Angelo, GoNetspeed’s head of sales and marketing, added, “We are committed to providing the best communication services to our customers. We believe that bringing the companies together will drive innovation to deliver reliable, high-speed fiber internet to more homes and businesses.”
Otelco has been serving more than 67,000 locations with local and long-distance telephone, digital high-speed data lines, transport services, network access, cable television and other related services.
GoNetspeed has been delivering high-speed fiber internet to more than 20 communities and passing over 70,000 homes and businesses in Connecticut and 15,000 homes and businesses in Pennsylvania.
Lazard Middle Market LLC served as financial advisor and Troutman Pepper Hamilton Sanders LLP served as legal advisor to Otelco. Paul, Weiss, Rifkind, Wharton & Garrison LLP served as legal counsel to Oak Hill.
