NorthState will be acquired by Segra

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HIGH POINT, N.C. —  NorthState Telecommunications Corporation announced Monday that the company will merge Segra, one of the largest independent fiber bandwidth companies in the eastern US, according to a NorthState news release.

Royster Tucker III, president and chief executive officer of NorthState, said, “We are excited to announce this transaction with Segra. We believe the combination of our businesses will deliver immediate and compelling value for NorthState’s shareholders and customers. Segra is an outstanding company that will continue to grow our network footprint in the Piedmont Triad Region of North Carolina and provides a great fit for our growing IT services business.”

Segra will reportedly pay $80.00 in cash per share for both Class A and Class B of NorthState’s common stock, which represents an enterprise value of approximately $240 million.

The Merger Consideration represents a premium of 31.1% and 34.5% to the December 6, 2019 closing prices of $61.00 and $59.50, respectively, for the Company’s Class A and B common shares.

Segra Chief Executive Officer Tim Biltz said, “Both NorthState and Segra have great histories of infrastructure, innovation and service. Customers and businesses throughout our service area will benefit from an expanded network, enhanced products and a superior customer experience as a result of this transaction.”

The merger agreement was unanimously approved by NorthState’s Board of Directors, the release says.

“We are incredibly grateful to High Point and the communities in the Piedmont Triad region that we’ve been a part of for 124 years, and for the reception we’ve received as we’ve expanded our IT services across multiple states,” Tucker said. “We are excited about the technology, products and service we believe this merger with Segra will bring to customers.”

It restricts NorthState’s ability to pay dividends on its common shares beyond those declared for the fiscal quarter ending December 31, 2019, payable in March of 2020.

Separately, acting in their capacity as shareholders, each of the members of the Board of Directors entered into a separate voting agreement with respect to all shares of NorthState Class A common stock beneficially or directly owned by such board member, representing approximately 37% of NorthState’s voting shares outstanding.

A proxy statement will be distributed to shareholders during the first quarter of 2020.

The transaction is anticipated to close in the second or third quarter of 2020 and is subject to customary regulatory approvals and other closing conditions.

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