By Lisa Kerner
Charlotte, N.C., March 20 - Integra Telecom, Inc. signed a definitive agreement to acquire Eschelon Telecom, Inc. for $30.00 per share, or a total purchase price of $710 million, including repayment of some $144 million in Eschelon debt.
According to Eschelon, the $30.00 share price represents a 48% premium to its 90-day moving average price and a 109% improvement over the stock price of one year ago.
The transaction is expected to close during the third quarter of 2007, according to a company news release.
Both companies' boards of directors have approved the agreement, which includes a $16.77 million termination fee.
Integra said it will fund the purchase and the refinancing of its existing debt with $1.2 billion in new capital, including senior secured debt facilities and senior notes.
Upon closing, Eschelon will no longer be publicly held and will operate under Integra Telecom, a privately held integrated communications provider based n Portland, Ore.
"The market position and financial strength resulting from this combination well positions the customers and employees of both companies for the future," Eschelon president and chief executive officer Richard A. Smith said in the release.
Smith is slated to join Integra Telecom's board of directors
Eschelon Telecom, located in Minneapolis, provides integrated communications services to small and medium-sized businesses in the western United States.
| Acquirer: | Integra Telecom, Inc.
|
| Target: | Eschelon Telecom, Inc.
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| Transaction value: | $710 million
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| Payment per share: | $30.00
|
| Termination fee: | $16.77 million
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| Announcement date: | March 20
|
| Expected closing: | Third quarter of 2007
|
| Stock price for target: | Nasdaq: ESCH; $25.59 on March 19
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