AT&T dials up Dixie with Centennial Communications buy

Regional telco-and-wireless provider Centennial Communications could, if things come together as AT&T hopes, be absorbed into the body of the larger company by next July.

Though based in New Jersey, Centennial Communications serves mainly rural populations in the South and certain of the the Lake States (Ohio, Indiana, Michigan), where it offers GSM access; and Puerto Rico and the Virgin Islands, where it offers CDMA. It claims about 1.1 million wireless subscribers, about 660,000 of those in the continental US.

The company has been in the care of investors Welsh Carson Anderson & Stowe since the height of the dot-com boom of the late 1990s. Welsh Carson had in recent years retained various firms looking to polish the company up for sale, acquisition, or other return on its $1.9 billion investment. AT&T turns out to have been the ticket, paying $944 million plus assumption of debt totaling around $2.8 billion.

Centennial's last quarterly earnings report, which was released about a month ago, shows modest (one cent) year-over-year per-share gains from 2007 and growth in all segments (US wireless, PR wireless, PR broadband). But it's the access AT&T is mainly after; currently, AT&T customers in those parts of the country end up on roam, with all the joy that implies. In addition, the buy gives AT&T improved presence in Puerto Rico.

Welsh Carson has already announced that it will vote in favor of the acquisition. AT&T, meanwhile, is on a bit of a pre-holiday spree, announcing last week its plan to acquire privately held Wi-Fi provider Wayport for $275 million.