Oak Hill Capital Partners entered into a definitive agreement to acquire Otelco Inc. (NasdaqCM:OTEL) from Ira Sochet and others for $40.4 million on July 26, 2020. Pursuant to the terms of the transaction, Oak Hill Capital will acquire Otelco shares for $11.75 per share in cash. Each Otelco RSU outstanding, whether vested or unvested, will be cancelled and converted into and will become a right to receive an amount in cash, without interest, equal to the amount of the Per Share Price multiplied by the total number of shares of Class A Common Stock subject to such Otelco RSU and each Otelco Option outstanding, whether vested or unvested, will be cancelled and converted into and will become a right to receive an amount in cash, without interest, equal to the amount of the Per Share Price (less the exercise price per share attributable to such Option) multiplied by the total number of shares of Class A Common Stock issuable upon exercise in full of such Option (with Options whose exercise price is equal to or greater than the Per Share Price being cancelled for no consideration). Oak Hill Capital has obtained term loan financing of $70 million, Revolving Facility in an aggregate principal amount of $20 million and equity financing commitment of $40.6 million for the transaction. As per the terms of agreement, on completion, Otelco Inc. will be wholly owned by Oak Hill Capital Partners. The merger will be accounted for as a “purchase transaction” for financial accounting purposes. Oak Hill will assume or refinance Otelco’s outstanding debt. The agreement provides for a “go-shop” period beginning on the date of the agreement and continuing until on August 25, 2020, during which Otelco is permitted to encourage and solicit alternative proposals from third parties. In case of termination, Oak Hill will be required to pay $3.5 million termination fee and Otelco will be required to pay $1.8 million, if the transaction is terminated in connection with a definitive alternative acquisition agreement entered into with another party on or prior to September 9, 2020, or $2.2 million, if the transaction is terminated in certain other circumstances. Oak Hill Partners Scott Baker and Benjy Diesbach, and Jeff Butler, Vice President at Oak Hill, will join Jennifer Jun, Principal at Oak Hill, on the Otelco Board of Directors following the transaction. The transaction is subject to approval of Otelco shareholders, Oak Hill having received a pay-off letter and any other documentation required in connection with the repayment of the Credit Agreement and the release and termination of any and all related liens and the written consent of Regions Bank to the consummation of the transactions, to the extent required under the PPP Loan as well as regulatory and other customary closing conditions including approvals from United States Federal Communications Commission and receipt of consents from certain state public service or public utility commissions. The transaction is not subject to financing contingencies. The shareholder meeting will be held on October 9, 2020. The transaction is unanimously approved by board of directors of Otelco and Oak Hill. In connection with the transaction, Oak Hill entered into a voting agreement with Ira Sochet (who holds approximately 49.6% stake in Otelco) to vote in favor of the transaction. As of October 9, 2020, Otelco shareholders approved the transaction. The transaction is expected to close in the fourth quarter of 2020. As of November 3, 2020, transaction is expected to close in the first quarter of 2021. As of March 3, 2021, the transaction is expected to close in the second quarter of 2021. Angelo Bonvino, Eric Goodison, Suhan Shim, Andrew Gaines, Uri Horowitz, Lindsay Parks, Brad Okun, Charles Googe, Peter Fisch, Geoffrey Chepiga, William O'Brien, Marta Kelly and Brian C. Lavin of Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal advisors to Oak Hill Capital Partners. Houlihan Lokey Capital, Inc. acted as financial advisor and fairness opinion provider, Garrett M. Baker and Vikram Nidamaluri of Lazard Middle Market LLC acted as financial advisor, Steven Khadavi and Joseph Walsh, Steven Khadavi and Wallace Bao of Troutman Pepper Hamilton Sanders LLP acted as legal advisors to Otelco. D.F. King & Co., Inc. acted as information agent and proxy solicitor to Otelco and will receive a fee of approximately $0.02 million for its services. Otelco will pay Houlihan Lokey Capital a fee of $0.25 million for its services, a portion of which became payable upon the execution of Houlihan Lokey’s engagement letter and the balance of which became payable upon the delivery of Houlihan Lokey’s opinion. Oak Hill Capital Partners completed the acquisition of Otelco Inc. (NasdaqCM:OTEL) from Ira Sochet and others on March 31, 2021. Otelco surviving the merger as the surviving corporation. As a result of the transaction’s completion, Otelco’s common stock will cease trading at the close of market today and will be delisted from the NASDAQ Stock Market. On March 31, 2021, in connection with the merger, Barbara M. Dondiego-Stewart, Howard J. Haug, Dayton R. Judd, Stephen P. McCall and Brian A. Ross resigned as members of the Board of Directors of Otelco Inc. as of the effective time. Oak Hill Capital are thrilled to partner with Richard Clark, who will continue to serve as President and Chief Executive Officer of the combined group of companies, and the rest of the senior management teams to become a leading fiber-to-the-premises operator in the northeastern United States.