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Entries in Atlantic Tele-Network:ATNI (5)

Thursday
Oct082015

Atlantic Tele-Network Announces Acquisition of Innovative Group of Companies

On Thursday, October 1st, Atlantic Tele-Network, Inc. (NASDAQ: ATNI) announced that it had acquired Caribbean Assets Holdings, LLC, the holding company for Innovative Communications Corporation (ICC) that provides cable TV, Internet and landline services primarily in the U.S. Virgin Islands.  ATN acquired the assets from the National Rural Utilities Cooperative Finance Corporation (CFC). 

Transaction Facts

  • ATN will pay approximately $145.0 million for the transaction.
  • The deal will be financed primarily with $85.0 million payable in cash and the option to finance the remaining $60.0 million of the purchase through a loan from an affiliate of CFC, the Rural Telephone Finance Cooperative (RTFC).
  • Deal is expected to close in mid-2016.

Deal History

  • In 2006, ICC was forced into involuntary bankruptcy after defaulting on RTFC loans; RTFC had loaned more than $500m to ICC between 1987 and 2001.
  • CFC purchased ICC’s assets through bankruptcy in 2010.
  • ICC majority shareholder Jeffrey Prosser appealed the sale to CFC to the Virgin Island Supreme Court, which upheld the sale to CFC in 2012.
  • Prosser co-founded of ATN in 1987 with Cornelius Prior Jr., current chairman of the board for ATN.
  • Prosser and Prior led ATN’s acquisition Virgin Island Telephone Company (Vitelco).
  • Management differences at ATN led to a split of the company’s assets with Prosser retaining Vitelco (dba Innovative).

Financial and Strategic Considerations

  • ATN is a provider of telecommunication services to rural, niche and other under-served markets and geographies in the United States, Bermuda and the Caribbean and owns and operates solar power systems in select locations across the United States. 
  • Enables ATN to offer quad play--wireless, broadband, cable and wireline telephone—in U.S. Virgin Islands. 
  • ICC’s company-wide operations revenue was approximately $100.0 million for its most recently completed fiscal year that ended May 31, 2015.

JSICA’s Take

  • The EV/TTM Rev in this transaction represents an implied multiple of 1.5x, a discount to recently observed ILEC deals in the U.S.    
  • Deal signals ATN’s desire to expand its operations in Caribbean after winding down is U.S. based wireless operations in recent years
  • ATN subsequently announced that it had agreed to acquire 51% of Bermuda based KeyTech Limited providing entry into the Cayman Islands market
Tuesday
May032011

Atlantic Tele-Network Bermuda Operations Merges with M3 Wireless

Source: Atlantic Tele-Network Press Release

Atlantic Tele-Network, Inc. (Nasdaq:ATNI) announced the completion of the merger of its Bermuda wireless subsidiary CellularOne with M3 Wireless, Ltd., a leading wireless provider in Bermuda. M3 is a subsidiary of KeyTech Limited, a Bermuda-based communications company.

The new company will keep the existing CellularOne management team and operate under the CellularOne brand. The company will have about half of the Bermuda wireless market, including both post- and pre-paid. As the two companies execute the merger, customers will see the transition to the single CellularOne brand. There will be no service disruptions and the new company will honor existing agreements, service plans and pricing. The new company will ensure customers of both companies receive the high level of service they have come to expect.

The merger has received all necessary regulatory approvals.

Wednesday
Apr062011

Atlantic Tele-Network Partners with Navajo Tribal Authority for Rural 4G

Source: Atlantic Tele-Network Press Release

Atlantic Tele-Network, Inc. (Nasdaq:ATNI), announced that its wholly owned subsidiary Commnet Wireless has created a joint venture with the Navajo Tribal Utility Authority (NTUA) to provide the first 3G wireless cell phone service and 4G broadband service to residents of the Navajo Nation.

The NTUA Wireless venture will lead to a substantial upgrade of telecommunications services currently available to residents of the Navajo Nation, which spans across parts of Arizona, New Mexico and Utah. The effort will provide new, affordable mobile phone service and access to high-speed data services and is being partially funded by a $32.1 million broadband grant to NTUA from the National Telecommunications & Information Association as part of the American Reinvestment and Recovery Act.

NTUA is a non-profit, multi-utility company, with services that include electric, gas, water, wastewater, renewable energy and telecommunications within the Navajo Nation. NTUA General Manager Walter Haase commented, "This venture with Commnet Wireless will allow us to dramatically improve existing services, while at the same time delivering the latest technology to our customers. As part of the effort, we will develop the communications infrastructure needed to bring the Navajo people many advanced telecommunication services already enjoyed by the majority of the U.S. population."

Tuesday
Nov022010

3Q10 Earnings: Atlantic Tele-Network

Source: ATNI Press Release

Atlantic Tele-Network (Nasdaq:ATNI) reported 3Q10 results on October 28, 2010. Commenting on the results, ATNI ceo Michael T. Prior said, "The integration of the Alltel asset acquisition is moving ahead as planned, and we continue to make progress in many areas, while refining our value proposition in these new markets. Revenue and subscriber numbers are broadly in line with our expectations to date, although expenses have been at the high end of those expectations for this quarter. As anticipated, previously-discussed transition initiatives and expenses are causing net attrition as well as higher costs. We expect margins to remain tight and net subscriber losses, particularly prepaid, to continue over the next few quarters. Our ability to drive subscriber additions, control churn and optimize our offerings is constrained by our limited billing and point of sale capabilities during this transition period. By the middle of 2011, however, when we should have much greater ability to tailor our offerings and no longer be burdened by the additional costs and overlaps caused by the transition services agreement that is currently in force, we expect to report more normalized EBITDA margins, net subscriber additions and churn."

3Q10 Highlights

  • Total revenues for 3Q10 were $205.0m, of which total wireless service revenues represented $173.0m, or 84%. This significant increase over last year's third quarter total revenues of $66.1 million resulted from the company's acquisition of certain former Alltel Wireless retail markets, licenses and network assets, which closed on April 26, 2010.
  • U.S.wireless service revenues totaled $158.8m, or 77% of total revenues, for the quarter.
  • Adjusted EBITDA for 3Q10 was $37.8m as compared to $35.0m in 3Q09, an increase of $2.8m, or 8%.
  • The results for 3Q10 were impacted by significant costs associated with the transition of the recently acquired Alltel Wireless assets. Specifically, sales and marketing costs in our U.S. Wireless segment included approximately $10.0m of additional expenses primarily related to an accelerated pace of customer contract renewals and extensions.
  • Total operating income for 3Q10 was $13.8m, down from $23.1m in 3Q09.
  • Net income attributable to ATNI's stockholders was $6.4m, or $0.41 per diluted share, as compared to $11.9m, or $0.78 per diluted share, in 3Q09.
U.S. Wireless segment:
  • Total service revenues from the U.S. wireless businesses amounted to $158.8m in 3Q10, compared to $31.8m in 3Q09. Total service revenues from the acquired Alltel properties for the quarter were $129.7m, or the entirety of this increase.
  • Retail wireless service revenues were $108.8m for 3Q10. The Company did not have a U.S. retail wireless business in 3Q09.
  • At the end of the 2010 third quarter, the Company had approximately 767k U.S. retail subscribers, of which approximately 550k were postpaid subscribers and approximately 217k were prepaid subscribers.
  • Wholesale wireless revenues were $50.0m, an increase of 57% over the $31.8m reported in 3Q09. Wholesale revenues from the acquired Alltel properties were $20.9m, or the entirety of this increase.
  • Data revenues accounted for 27% of wholesale wireless revenues for the quarter, compared to 19% a year earlier.

International Wireless segment:

  • Total revenues from international wireless (which includes revenues from fixed wireless data services) amounted to $14.2m in 3Q10, an increase of $2.5m, or 21%, over $11.7m reported in 3Q09. This increase primarily resulted from growth in the number of wireless subscribers in Guyana and expansion in the Caribbean.
  • In 3Q10 the company launched new wireless voice and data service in the U.S. Virgin Islands.

Wireline Operations:

  • Total revenues from wireline amounted to $20.8m in 3Q10, a decrease of $1.2m or 5% from $22.0m reported in 3Q09. The decline resulted from a $1.7m decrease in international long distance revenues in Guyana, partially offset by increased data revenue in that country and increased revenues generated by U.S. wireline operations.
  • ATNI activated a new undersea cable to Guyana, which will help to provide high-speed data and internet services to that country, resulting in expected growth in data and internet revenue for the International Integrated Telephony segment.
Connections as of September 30, 2010:
  • The Company ended the quarter with approximately 1.1m wireless subscribers across all markets.
  • U.S. wireless customers totaled 767k in 3Q10, including 217k prepay and 550k postpay subscribers.
  • Monthly blended subscriber churn increased to 4.41% during 3Q10, up from 3.85% in 2Q10.
Guidance:
  • The Company expects full year 2010 capital expenditures to be approximately $130 to $140m, of which $85 to $95m is expected to be incurred by the U.S. Wireless segment.
  • In 3Q10 the company increased the available borrowings under its existing credit facility by $75m, bringing the total credit facility to $375m, which will allow the Company to fund planned capital expenditures and growth initiatives.
Thursday
Sep302010

Atlantic Tele-Network Increases Credit Facility to $370m

Source: ATNI Press Release

Atlantic Tele-Network (Nasdaq:ATNI) today reported that it has amended and restated its existing senior secured credit facility, providing for the addition of a new $50m term loan and a $25m expansion of its existing revolver facility. The amended and restated credit facility also includes the company’s existing $72m and $148m term loans, which were outstanding under the company's previous credit facility. The company’s existing $75m revolving loan was increased to $100m. CoBank, ACB acted as administrative agent and lead arranger in the transaction. Justin D. Benincasa, cfo of the company, said, “This expansion gives us the flexibility to fund planned capital expenditures and continue the Company’s growth initiatives.”

The company used a portion of the new term loan to repay outstanding borrowings under the company’s revolving loan. The company expects to use the remaining proceeds from the credit facility for working capital expenses, capital expenditures, and other corporate purposes. The company currently has no borrowings under its amended revolving loan.