8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 15, 2021

CONSOLIDATED COMMUNICATIONS HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware	000-51446	02-0636095
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

2116 South 17th Street

Mattoon, Illinois 61938

(Address of Principal Executive Offices) (Zip Code)

(217) 235-3311

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock – $0.01 par value	CNSL	The Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 3.02. Unregistered Sales of Equity Securities.

As previously announced, on October 2, 2020, in connection with the  investment agreement, dated as of September 13, 2020 (the “Investment Agreement”) by and between Consolidated Communications Holdings, Inc. (the “Company”) and Searchlight III CVL, L.P., an affiliate (the “Investor”) of Searchlight Capital Partners, L.P.: (i) the Company issued to the Investor 6,352,842 shares (the “Initial Common Shares”) of common stock of the Company, par value $0.01 per share (the “Common Stock”) and (ii) the Company and the Investor entered into a contingent payment right agreement (the “CPR Agreement”) pursuant to which the Company issued to the Investor a contingent payment right (the “Contingent Payment Right”) that will automatically convert into shares of Common Stock subject to the terms and conditions of the Contingent Payment Right Agreement.

On July 15, 2021, the Company received the final state public utility commission regulatory approval necessary for the conversion of the Contingent Payment Right into shares of Common Stock. As a result, the Contingent Payment Right was automatically converted into 17,870,012 shares of Common Stock (the “Additional Common Shares”), which shares were issued to the Investor on July 16, 2021.  Such shares, together with the Initial Common Shares, constitute approximately 24.5% of the Company’s outstanding Common Stock after giving effect to such conversion. Subject to the receipt of certain approvals of the Federal Communications Commission and the other terms and conditions set forth in the Investment Agreement, the Investor will invest an additional $75,000,000 into the Company and will receive, among other things, an additional 15,115,899 shares of Common Stock.  Such shares, together with the Initial Common Shares and the Additional Common Shares, will constitute approximately 35% of the Company’s outstanding Common Stock after giving effect to such issuance.

The descriptions of the Investment Agreement and the CPR Agreement set forth herein are not complete and are qualified in their entirety by the full text of such documents, which are attached as Exhibit 10.1 to in the Company’s Current Report on Form 8-K, filed with the SEC on September 14, 2020, and as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on October 2, 2020, respectively, each of which are incorporated by reference herein.

Item 7.01. Regulation FD Disclosure.

On July 16, 2021, the Company issued a press release announcing the issuance of the Additional Common Shares.  The full text of the press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

The information in this Item 7.01 of this Form 8-K, including Exhibit 99.1, is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933 or the Exchange Act, except as otherwise stated in such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

No.	Description
99.1	Press Release dated July 16, 2021.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURE

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 hereunto duly authorized.

	CONSOLIDATED COMMUNICATIONS HOLDINGS, INC.
Date: July 16, 2021	By:	/s/ Steven L. Childers
		Steven L. Childers
		Chief Financial Officer

EX-99.1

Exhibit 99.1

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

Fully funded fiber expansion plan to bring superior, broadband services to 1.6 million customers, more than 70% of Company’s service area, by 2025

MATTOON, Ill. – Jul. 16, 2021 – Consolidated Communications (NASDAQ: CNSL) (the “Company”) announced today that it has received all required state Public Utilities Commission (PUC) regulatory approvals necessary for the conversion of the contingent payment right (the “CPR”) issued by the Company to an affiliate of Searchlight Capital Partners, L.P. (“Searchlight”) in connection with the previously announced investment by Searchlight in the Company (the “Investment”). By securing all required state PUC regulatory approvals, the CPR has now converted into an additional number of shares of the Company’s common stock, which together with the shares issued to Searchlight at the completion of the first stage of the Investment on Oct. 2, 2020, constitutes approximately 24.5% of the Company’s outstanding shares.

“Our fully funded, fiber expansion plan is off to a fast start,” said Bob Udell, president and chief executive officer at Consolidated Communications. “We are pleased to have secured shareholder as well as the required state regulatory approvals and remain on track to close on the full Searchlight investment following FCC approval expected later this year. This partnership is about driving long-term value for all Consolidated shareholders. The transformation of our business is well underway and will bring significant benefits to consumers, commercial and carrier customers across our service areas.”

Investment Structure

The Investment is structured in two stages. In the first stage, which was completed on Oct. 2, 2020, Searchlight invested $350 million in exchange for 8 percent 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 with a principal amount of approximately $395.5 million (the “Note”).

In May 2021, the Company received overwhelming shareholder approval for all proposals related to the Investment. The Company has also secured all required state PUC regulatory approvals, as well as approval under the Hart-Scott-Rodino Act, for the Investment.

The closing of the second stage of the Investment (the “Second Closing”) is conditioned on the receipt by the Company of approval of the Federal Communications Commission (the “FCC”). At the Second Closing, Searchlight will invest an additional $75 million in the Company and will receive an additional 15,115,899 shares of the Company’s common stock. In addition, the Note will also convert into shares of perpetual preferred stock of the Company with an aggregate 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 occur later this year, subject to the receipt of FCC approval. Following the Second Closing, Searchlight will hold approximately 35% of the Company’s common stock on an as-converted basis.

Forward-Looking Statements

Certain statements in this press release are forward-looking statements and are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. These forward-looking statements

reflect, among other things, our current expectations, plans, strategies, and anticipated 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 the uncertainties relating to the impact of the novel coronavirus (COVID-19) pandemic on the Company’s business, results of operations, cash flows, stock price and employees; the possibility that any of the anticipated benefits of the strategic investment from Searchlight or our refinancing of outstanding debt, including our senior secured credit facilities, will not be realized; the outcome of any legal proceedings that may be instituted against the Company or its directors; the ability to obtain regulatory approvals and meet other closing conditions to the investment on a timely basis or at all, including the risk that regulatory approvals required for the investment are not obtained on a timely basis or at all, or are obtained subject to conditions that are not anticipated or that could adversely affect the Company or the expected benefits of the investment; the anticipated use of proceeds of the strategic investment; economic and financial market conditions generally and economic conditions in our service areas; various risks to the price and volatility of our common stock; 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 cash to service and repay the debt restrictions contained in our debt agreements that limit the discretion of management in operating the business; regulatory changes, including changes to subsidies, rapid development and introduction of new technologies and intense competition in the telecommunications industry; risks associated with our possible pursuit of acquisitions; system failures; cyber-attacks, information or security breaches or technology failure of ours or of a third party; losses of large customers or government contracts; risks associated with the rights-of-way for the network; disruptions in the relationship with third party vendors; losses of key management personnel and the inability to attract and retain highly qualified management and personnel in the future; changes in the extensive governmental legislation and regulations governing telecommunications providers and the provision of telecommunications services; new or changing tax laws or regulations; telecommunications carriers disputing and/or avoiding their obligations to pay network access charges for use of our network; high costs of regulatory compliance; the competitive impact of legislation and regulatory changes in the telecommunications industry; and liability and compliance costs regarding environmental regulations; and risks associated with discontinuing paying dividends on our common stock. A detailed discussion of these and other risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements are discussed in more detail in our filings with the SEC, including our reports on Form 10-K and Form 10-Q. Many of these circumstances are beyond our ability to control or predict. Moreover, forward-looking statements necessarily involve assumptions on our part. These forward-looking statements generally are identified by the words “believe,” “expect,” “anticipate,” “estimate,” “project,” “intend,” “plan,” “should,” “may,” “will,” “would,” “will be,” “will continue” or similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company and its subsidiaries to be different from those expressed or implied in the forward-looking statements. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements that appear throughout this press release.  Furthermore, forward-looking statements speak only as of the date they are made. Except as required under the federal securities laws or the rules and regulations of the SEC, we disclaim any intention or obligation to update or revise publicly any forward-looking statements. You should not place undue reliance on forward-looking statements.

About Consolidated Communications

Consolidated Communications Holdings, Inc. (NASDAQ: CNSL) is dedicated to moving people, businesses and communities forward by delivering the latest reliable communications solutions. Consumers, businesses and wireless and wireline carriers depend on Consolidated for a wide range of high-speed internet, data, phone, security, cloud and wholesale carrier solutions. With a network spanning nearly 50,000 fiber route miles, Consolidated is a top 10 U.S. fiber provider, turning technology into solutions that are 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 businesses where its long-term capital and strategic support accelerate value creation for all stakeholders. For more information, please visit www.searchlightcap.com.

# # #

Contact:

Investor Relations Contact:
Jennifer Spaude, 507-386-3765
investor@consolidated.com

XML

Document and Entity Information	Jul. 15, 2021
Document and Entity Information [Abstract]
Document Type	8-K
Document Period End Date	Jul. 15, 2021
Entity File Number	000-51446
Entity Registrant Name	CONSOLIDATED COMMUNICATIONS HOLDINGS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	02-0636095
Entity Address, Address Line One	2116 South 17th Street
Entity Address, City or Town	Mattoon
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	61938
City Area Code	217
Local Phone Number	235-3311
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock – $0.01 par value
Trading Symbol	CNSL
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Entity Central Index Key	0001304421
Amendment Flag	false