Shentel Completes $1.05B Horizon Communications Acquisition

TL;DR

Shentel just bought Horizon for $1.05B, expanding their fiber network.

AI Summary

On April 1, 2024, Shenandoah Telecommunications Company (Shentel) announced the completion of its acquisition of Horizon Communications, a deal valued at approximately $1.05 billion. This strategic acquisition is expected to expand Shentel's broadband and fiber network footprint.

Why It Matters

This acquisition significantly expands Shentel's market presence and network infrastructure, potentially leading to improved services and growth opportunities in its service areas.

Risk Assessment

Risk Level: medium — Acquisitions of this size carry inherent integration risks and may impact the company's financial leverage.

Key Numbers

• $1.05B — Acquisition Value (Total cost of acquiring Horizon Communications)

Key Players & Entities

• Shenandoah Telecommunications Company (company) — Registrant
• Shentel (company) — Commonly known name for Shenandoah Telecommunications Company
• Horizon Communications (company) — Acquired company
• $1.05 billion (dollar_amount) — Acquisition value
• April 1, 2024 (date) — Effective date of acquisition completion

FAQ

Key Financial Figures

• $305 million — is one of the Sellers; and (ii) paying $305 million in cash consideration to the other Sell
• $39 million — s an additional amount of approximately $39 million based on Horizon's capital expenditures
• $0.01 — le Perpetual Preferred Stock, par value $0.01 per share (the "Series A Preferred Stoc
• $1,000 — eferred Stock"), at a purchase price of $1,000 per share in exchange for $81 million i
• $81 million — ice of $1,000 per share in exchange for $81 million in cash. The Series A Preferred Stock i
• $24.50 — of Common Stock at an exchange price of $24.50 per share (as it may be adjusted pursua
• $225 million — reement in an aggregate amount equal to $225 million and an increase in the revolving commit
• $50 million — Credit Agreement in an amount equal to $50 million. The foregoing description of the Thir

Filing Documents

• f8k_040124.htm (8-K) — 48KB
• exh_22.htm (EX-2.2) — 19KB
• exh_101.htm (EX-10.1) — 355KB
• exh_102.htm (EX-10.2) — 297KB
• exh_103.htm (EX-10.3) — 204KB
• exh_104.htm (EX-10.4) — 1170KB
• exh_991.htm (EX-99.1) — 9KB
• f1.jpg (GRAPHIC) — 2KB
• f2.jpg (GRAPHIC) — 4KB
• 0001171843-24-001743.txt ( ) — 2720KB
• shen-20240401.xsd (EX-101.SCH) — 3KB
• shen-20240401_lab.xml (EX-101.LAB) — 33KB
• shen-20240401_pre.xml (EX-101.PRE) — 22KB
• f8k_040124_htm.xml (XML) — 4KB

01. Entry Into a Material Definitive Agreement

Item 1.01. Entry Into a Material Definitive Agreement. The information set forth below under the headings " GCM Grosvenor Investor Rights Agreement, " " ECP Registration Rights Agreement " and " Amendment No. 3 to Credit Agreement " in Item 2.01 of this Current Report on Form 8-K is incorporated by reference herein.

01. Completion of Acquisition or Disposition of Assets

Item 2.01. Completion of Acquisition or Disposition of Assets. Horizon Transaction On April 1, 2024 (the "Closing Date"), Shenandoah Telecommunications Company ("Shentel") completed its previously announced acquisition of Horizon Acquisition Parent LLC, a Delaware limited liability company ("Horizon"), pursuant to the terms of an Agreement and Plan of Merger, dated October 24, 2023, by and among Shentel, Horizon, the sellers set forth on the signature pages thereto (each, a "Seller" and collectively, the "Sellers") and the other parties thereto (as amended by the First Amendment to Agreement and Plan of Merger, dated April 1, 2024, the "Merger Agreement"). 100% of the outstanding equity interests of Horizon in exchange for (i) issuing 4,100,375 shares of Shentel's common stock, no par value ("Common Stock"), to an investment fund managed by affiliates of GCM Grosvenor ("GCM Grosvenor"), which is one of the Sellers; and (ii) paying $305 million in cash consideration to the other Sellers and certain third parties, including Horizon's existing lenders to discharge debt (collectively, the "Horizon Transaction"). In addition, Shentel paid certain Sellers an additional amount of approximately $39 million based on Horizon's capital expenditures funded by capital contributions of such Sellers between July 1, 2023 and the Closing Date, plus interest in the amount of 6.00% per annum. The Merger Agreement and the Horizon Transaction contemplated thereby are more fully described in Shentel's Current Report on Form 8-K, filed with the U.S. Securities and Exchange Commission on October 25, 2023 (the "Initial Form 8-K"), which description is incorporated herein by reference. Such description and the foregoing description of the Merger Agreement and the Horizon Transaction do not purport to be complete and are qualified in their entirety by reference to the full text of the Mer

02. Unregistered Sales of Equity Securities

Item 3.02. Unregistered Sales of Equity Securities. On the Closing Date, Shentel issued 4,100,375 shares of Common Stock to GCM Grosvenor and Shentel Broadband issued 81,000 shares of Series A Preferred Stock to ECP Investor, in each case in reliance on exemptions from registration. The information set forth above under the headings " GCM Grosvenor Investor Rights Agreement " and " ECP Investment Agreement and Series A Preferred Stock" in Item 2.01 of this Current Report on Form 8-K is incorporated herein by reference.

03. Material Modifications to Rights of Security Holders

Item 3.03. Material Modifications to Rights of Security Holders. The information set forth above under the headings " GCM Grosvenor Investor Rights Agreement " and " ECP Investment Agreement and Series A Preferred Stock" in Item 2.01 of this Current Report on Form 8-K is incorporated herein by reference.

03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. The information set forth above under the headings " GCM Grosvenor Investor Rights Agreement " and " ECP Investment Agreement and Series A Preferred Stock" in Item 2.01 of this Current Report on Form 8-K is incorporated herein by reference.

01 Regulation FD Disclosure

Item 7.01 Regulation FD Disclosure. On April 1, 2024, Shentel issued a press release announcing the closing of the Horizon Transaction. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. The information in Item 7.01 of this Current Report on Form 8-K (including Exhibit 99.1) shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liability of such section, nor shall such information (including Exhibit 99.1) be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of the general incorporation language of such filing, except as shall be expressly set forth by specific reference in such filing.

01. Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits. (a) Financial Statements of Business Acquired. The financial statements of Horizon required by this item will be filed by amendment to this Current Report on Form 8-K no later than 71 calendar days after the date this Current Report on Form 8-K is required to be filed. (b) Pro Forma Financial Information, The pro forma financial information required by this item will be filed by amendment to this Current Report on Form 8-K no later than 71 calendar days after the date this Current Report on Form 8-K is required to be filed. (d) Exhibits. Exhibit No. Description 2.1* Agreement and Plan of Merger, dated October 24, 2023, by and among Shenandoah Telecommunications Company, Fox Merger Sub I Inc., Fox Merger Sub II LLC, Horizon Acquisition Parent LLC, Novacap TMT V, L.P. and the Sellers set forth on the signature pages thereto (incorporated by reference to Exhibit 2.1 to Shentel's Current Report on Form 8-K filed on October 26, 2023) 2.2 First Amendment to Agreement and Plan of Merger, dated April 1, 2024, by and among Shenandoah Telecommunications Company and Novacap TMT V, L.P., as Seller Representative 2.3* Investment Agreement, dated October 24, 2023, by and among Shenandoah Telecommunications Company, Shentel Broadband Holding Inc., ECP Fiber Holdings, LP and, solely for the limited purposes specified therein, Hill City Holdings, LP (incorporated by reference to Exhibit 2.2 to Shentel's Current Report on Form 8-K filed on October 26, 2023) 10.1 Certificate of Designations of Series A Participating Exchangeable Perpetual Preferred Stock 10.2* Investor Rights Agreement, dated April 1, 2024, between Shenandoah Telecommunications Company and LIF Vista, LLC 10.3* Registration Rights Agreement, dated April 1, 2024, by and among Shenandoah Telecommunications Company, ECP Fiber Holdings, LP and, solely for the limited purposes specified therein, Hill City Holdings, LP 10.4* Amendment No. 3 to Credit

Forward-Looking Statements

Forward-Looking Statements This communication contains forward-looking statements about Shentel within the meaning of the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) regarding, among other things, its business strategy, its prospects and its financial position. These statements can be identified by the use of forward-looking terminology such as "believes," "estimates," "expects," "intends," "may," "will," "plans," "should," "could," or "anticipates" or the negative or other variation of these or similar words, or by discussions of strategy or risks and uncertainties. The forward-looking statements are based upon management's beliefs, assumptions and current expectations and may include comments as to Shentel's beliefs and expectations as to future events and trends affecting its business that are necessarily subject to uncertainties, many of which are outside Shentel's control. Although management believes that the expectations reflected in the forward-looking statements are reasonable, forward-looking statements are not, and should not be relied upon as, a guarantee of future performance or results, nor will they necessarily prove to be accurate indications of the times at which such performance or results will be achieved, and actual results may differ materially from those contained in or implied by the forward-looking statements as a result of various factors. A discussion of other factors that may cause actual results to differ from management's projections, forecasts, estimates and expectations is available in Shentel's filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2023 and our Quarterly Reports on Form 10-Q. Those factors may include, among others, Shentel's ability to satisfy the closing conditions for subsequent tower sale closings, the

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SHENANDOAH TELECOMMUNICATIONS COMPANY Dated: April 1, 2024 /s/ James J. Volk James J. Volk Senior Vice President – Chief Financial Officer

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View this 8-K filing on SEC EDGAR