XML 21 R9.htm IDEA: XBRL DOCUMENT v3.25.1
Acquisition of Horizon
 3 Months Ended
Mar. 31, 2025
Business Combinations [Abstract]  
Acquisition of Horizon Acquisition of Horizon
On April 1, 2024 (the “Closing Date”), Shentel completed the acquisition of 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”).

The total purchase price used to apply the acquisition method of accounting was $416.2 million, which consisted of $349.4 million of cash consideration paid and $71.8 million of common stock, representing the fair value of 4,100,375 shares of Shentel’s common stock issued to a selling shareholder of Horizon. In accordance with Accounting Standards Codification (ASC) 805, “Business Combinations,” the allocation of the consideration value was subject to adjustment until the Company completed its analysis, in a period of time, but not to exceed one year after the date of acquisition, or April 1, 2025, in order to provide the Company with the time to complete the valuation of its assets and liabilities. As of April 1, 2025, the Company has completed and finalized its analysis and allocation of the consideration value to assets acquired and liabilities assumed.

In connection with the acquisition, Shentel incurred integration and acquisition-related costs of $0.6 million and $0.4 million related to severance, legal, banking, information technology, and representation and warranty insurance and other similar expenses for the three months ended March 31, 2025 and 2024, respectively. These costs are recorded in restructuring, integration and acquisition expenses in the Company’s unaudited condensed consolidated statements of operations.

The Company has included the results of the operations of Horizon for financial reporting purposes for the period subsequent to the date of acquisition. The unaudited pro forma operating revenues and loss before income taxes of the Company for the three months ended March 31, 2024, as if the Horizon Transaction had occurred at the beginning of the period, were $85.1 million and $10.1 million, respectively. The pro forma results are based upon estimated valuations of the assets acquired and liabilities assumed as well as preliminary estimates of depreciation and amortization charges thereon. Other pro forma adjustments include the following:

•historical depreciation expense was adjusted for the fair value adjustment increasing the basis of property, plant and equipment and shorter estimated useful lives to conform to the Company’s standard policy and the acceleration of depreciation on certain equipment;
•incremental amortization due to the customer-based contract rights associated with acquired customers; and
•removal of Horizon’s interest expense and amortization of deferred financing fees due to the repayment of the outstanding principal of Horizon’s debt.