Why ATN International (ATNI) Is Buying Alaska Communications Systems (ALSK) For About $332 Million

By Noah Long ● January 4, 2021
  • Alaska Communications Systems Group, Inc. (NASDAQ: ALSK) announced it entered into a definitive agreement pursuant to which it will be acquired by a newly formed entity owned by ATN International, Inc. (NASDAQ: ATNI). These are the details.

Alaska Communications Systems Group, Inc. (NASDAQ: ALSK) announced today that on December 31, 2020, it entered into a definitive agreement pursuant to which it will be acquired by a newly formed entity owned by ATN International, Inc. (NASDAQ: ATNI) (“ATN”) and Freedom 3 Capital, LLC (FC3) in an all-cash transaction valued at approximately $332 million, including net debt.

And the merger will result in Alaska Communications becoming a consolidated and majority-owned subsidiary of ATN and is expected to close in the second half of 2021. Alaska Communications’ prior agreement to be acquired by an affiliate of Macquarie Capital and GCM Grosvenor through its Labor Impact Fund, L.P., has been terminated. In connection with the termination, Alaska Communications paid Macquarie and GCM a $6.8 million break-up fee.

Under the terms of the agreement, an affiliate of ATN will acquire all the outstanding shares of Alaska Communications common stock for $3.40 per share in cash. And this represents a premium of approximately 78% over the closing per share price of $1.91 on November 2, 2020, the last trading day prior to the date when Alaska Communications’ original merger agreement with Macquarie and GCM was executed — a 70% premium to the 30-day volume-weighted average price up to and including November 2, 2020, and a 4% premium to Macquarie and GCM’s prior binding agreement to acquire the company.

The merger is subject to the approval of Alaska Communications’ stockholders, regulatory approvals, and other customary closing conditions. And the merger has fully committed debt and equity financing and is not subject to any condition with regard to financing. 

Alaska Communications’ Board of Directors has unanimously approved the agreement and recommends that Alaska Communications’ stockholders approve the proposed merger and merger agreement. 

TAR Holdings, LLC — which owns approximately 8.8% of the outstanding shares of Alaska Communications common stock — has entered into a voting agreement with ATN agreeing, among other things, to vote in favor of the merger. 

KEY QUOTES:

“Today’s announcement is the product of a comprehensive process that demonstrates what a strong business the team at Alaska Communications has built. The agreement with ATN is a great result for our stockholders, who will receive significant near-term value.”

— David W. Karp, Chairman of the Alaska Communications Board of Directors

“This transaction represents an exciting opportunity to augment our market position, as well as, expand our capabilities to better serve our customers. ATN has extensive telecommunications expertise, a strong track record of successfully investing in and operating capital-intensive businesses and has a strong financial position highlighted by its net cash position. These are critical attributes that will support our strategy to deliver superior customer service utilizing our fiber-based network solutions. We firmly believe this transaction will allow us to enhance our expanded fiber network services and drive long-term value for our employees and customers in Alaska.”

— Bill Bishop, President and Chief Executive Officer of Alaska Communications

“This investment and merger allows us to enter a new market with many similar characteristics to our existing operations in the U.S. and elsewhere. Further, it aligns with our strategy to leverage the broad capabilities of our operating platform to enhance and augment leading providers of facilities-based communications services in distinctive markets. ATN has a long history of enabling its subsidiaries to gain and maintain strong market positions by investing in high quality infrastructure, the latest technologies and creative solutions to give customers a superior experience. We recognize the same determination and customer-centric approach in the Alaska Communications team. Our industry is rapidly changing, and communications requirements have never been more essential and critical than they are today. We look forward to combining our resources and experience with Alaska Communications’ market knowledge and reputation for superior service to provide industry-leading communications products and services to customers in Alaska and beyond.”

— Michael Prior, Chairman and Chief Executive Officer of ATN