Consolidated Communications Receives All Regulatory Approvals From State PUC For Investment From Searchlight Capital Partners

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MATTOON, Illinois – (COMMERCIAL THREAD) – Consolidated Communications (NASDAQ: CNSL) (the “Company”) announced today that it has received all regulatory approvals from the Public Utilities Commission (PUC) required for the conversion of the conditional payment right (the “ CPR ”) issued by the Company to an affiliate of Searchlight Capital Partners, LP (“ Searchlight ”) in connection with Searchlight’s previously announced investment in the Company (the“ Investment ”). By obtaining all the state-required PUC regulatory approvals, the CPR has now converted into an additional number of ordinary shares of the Company, which together with the shares issued to Searchlight upon completion of the first stage of the investment on October 2, 2020, constitutes approximately 24.5% of the outstanding shares of the Company.

“Our fully funded fiber expansion plan is getting off to a quick start,” said Bob Udell, President and CEO of Consolidated Communications. “We are pleased to have obtained the required shareholder approvals as well as state regulatory authorities and remain on track to complete the full investment in Searchlight following the expected FCC approval later this year. This partnership aims to generate long-term value for all Consolidated shareholders. Our business transformation is on track and will bring significant benefits to consumers, business customers and carriers in all of our service areas. ”

Investment structure

The investment is structured in two stages. In the first stage, which ended on October 2, 2020, Searchlight invested $ 350 million in exchange for 8% of the company’s common stock. Pursuant to the terms of the transaction, Searchlight also received the CPR and the right to receive an unsecured subordinated note in the principal amount of approximately $ 395.5 million (the “Note”).

In May 2021, the Company received overwhelming shareholder approval for all investment-related proposals. The Company has also obtained all PUC regulatory approvals required by the State, as well as the approval under the Hart-Scott-Rodino Act, for the investment.

Closing of the second stage of the Investment (the “Second Closing”) is conditional upon the Company receiving approval from the Federal Communications Commission (the “FCC”). On the second closing, Searchlight will invest an additional $ 75 million in the company and receive an additional 15,115,899 common shares of the company. In addition, the note will also be converted into perpetual preferred shares of the Company with a total liquidation preference equal to the principal amount of the note plus accrued interest at the time of conversion. The Company expects the second closing to take place later this year, subject to receipt of FCC approval. After the second closing, Searchlight will own approximately 35% of the common shares of the Company on an as converted basis.

Forward-looking statements

Certain statements contained in this press release are forward-looking statements and are made in accordance with the safe harbor provisions of the Securities Litigation Reform Act of 1995. These forward-looking statements reflect, among other things, our expectations, plans, strategies and financial results. There are a number of risks, uncertainties and conditions that may cause our actual results to differ materially from those expressed or implied by these forward-looking statements. These risks and uncertainties include a number of factors related to our business, including uncertainties relating to the impact of the novel coronavirus (COVID-19) pandemic on the Company’s business, operating results, cash flows. cash, stock prices and employees; the possibility that any of the anticipated benefits of Searchlight’s strategic investment or our outstanding debt refinancing, including our senior secured credit facilities, may not materialize; the outcome of any legal proceedings that may be brought against the Company or its directors; the ability to obtain regulatory approvals and to meet other investment closing conditions on time or not at all, including the risk that the regulatory approvals required for the investment will not be obtained in a timely manner or not at all, or are obtained subject to conditions which are not anticipated or could adversely affect the Company or the expected profits from the investment; the intended use of the proceeds of the strategic investment; the economic and financial conditions of the markets in general and the economic conditions in our service areas; various risks to the price and volatility of our common shares; changes in the valuation of pension plan assets; the substantial amount of debt and our ability to repay or refinance it or incur additional debt in the future; our need for a significant amount of liquidity to service and repay debt restrictions contained in our debt agreements which limit management’s discretion in the operation of the business; regulatory changes, including changes in subsidies, the rapid development and introduction of new technologies and intense competition in the telecommunications industry; the risks associated with our possible pursuit of acquisitions; system failures; cyber attacks, information or security breaches or technological failures of ours or a third party; loss of large customers or government contracts; risks associated with network rights-of-way; disruptions in the relationship with third party suppliers; the loss of key management personnel and the inability to attract and retain highly qualified managers and personnel in the future; changes in extensive government legislation and regulations governing telecommunications providers and the provision of telecommunications services; new or changing tax laws or regulations; telecommunications operators contesting and / or avoiding their obligations to pay network access charges for the use of our network; the high costs of regulatory compliance; the competitive impact of legislative and regulatory changes in the telecommunications industry; and the costs of liability and compliance with environmental regulations; and the risks associated with stopping the payment of dividends on our common shares. A detailed discussion of these and other risks and uncertainties that could cause actual results and events to differ materially from these forward-looking statements is discussed in more detail in our filings with the SEC, including our reports on the forms. 10-K and 10-Q. Many of these circumstances are beyond our ability to control or predict. In addition, forward-looking statements necessarily involve assumptions on our part. These forward-looking statements are generally identified by the words “believe”, “expect”, “anticipate”, “estimate”, “project”, “intend”, “plan”, “should”, “could “,” “Would”, “will”, “continue” or similar expressions. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company and its subsidiaries to differ from those expressed or implied in the forward-looking statements. . All forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the cautionary statements that appear throughout this press release. In addition, forward-looking statements speak only as of the date on which they are made. Except as required by federal securities laws or SEC rules and regulations, we disclaim any intention or obligation to publicly update or revise any forward-looking statement. You should not place undue reliance on forward-looking statements.

About consolidated communications

Consolidated Communications Holdings, Inc. (NASDAQ: CNSL) is dedicated to advancing people, businesses and communities by providing the latest reliable communications solutions. Consolidated consumers, businesses, and wireless and wireline carriers depend on Consolidated for a wide range of high-speed Internet, data, telephony, security, cloud and wholesale solutions. With a network spanning nearly 50,000 kilometers of fiber route, Consolidated is one of the top 10 fiber providers in the United States, turning technology into solutions backed by exceptional customer support. Learn more at consolidated.com.

About Searchlight Capital Partners

Searchlight is a global private investment firm with over $ 9 billion in assets under management and offices in New York, London and Toronto. Searchlight seeks to invest in companies where its long-term capital and strategic support accelerate the creation of value for all stakeholders. For more information, please visit www.searchlightcap.com.


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