Lumos Networks Enters into Definitive Agreement to be Acquired by EQT Infrastructure

EQT Infrastructure to pay $18.00 per share in all-cash transaction

EQT Infrastructure to Support Lumos Networks in becoming a broader Telecommunication Infrastructure Platform in the U.S.

WAYNESBORO, Va.–(BUSINESS WIRE)– Lumos Networks Corp. (“Lumos Networks”) (NASDAQ:LMOS, news, filings), a leading fiber-based service provider in the Mid-Atlantic region, announced today that it has entered into a definitive agreement (the “agreement”) to be acquired by the EQT Infrastructure investment strategy (“EQT Infrastructure”), for $18.00 per share, resulting in an enterprise value of approximately $950 million.

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Under the terms of the agreement, EQT Infrastructure will acquire all of Lumos Networks’ common stock. Shareholders of record will receive $18.00 in cash per share of Lumos Networks’ common stock, which is a premium of 18.2% to the closing price of $15.23 on February 17, 2017. The offer price represents a 34.9% premium to the volume-weighted price average of the last 12 months of $13.35 and a 16.5% premium to $15.45, which is the average closing price of the last 20 trading days.

“Our Board of Directors concluded, after a thorough review of the strategic alternatives, that the sale of Lumos Networks to EQT Infrastructure was in the best interests of Lumos Networks and its shareholders,” said Robert Guth, Chairman of the Board of Lumos Networks. “I am pleased to announce this transaction and the beginning of the partnership between Lumos Networks and EQT Infrastructure in order to capitalize on the market opportunities ahead of us in the U.S. communications infrastructure market.”

“We are excited about the opportunity to acquire Lumos Networks, having been impressed by the Company’s strategic vision and execution since it became a public company in 2011. We look forward to working collaboratively with Lumos Networks’ team and to drawing upon EQT’s deep expertise in the telecommunications and fiber sector in support of the Company’s growth and expansion,” said Jan Vesely, Director at investment advisor EQT Partners.

“I am very pleased that our shareholders are realizing the benefits of our transformational strategy,” said Timothy G. Biltz, President and CEO of Lumos Networks. “Since my tenure of CEO began in April of 2012, Lumos has achieved an annualized shareholder return of nearly 19%, during which time we transformed into an industry leading fiber based bandwidth infrastructure services company.”

Mr. Biltz continued, “I would like to extend my heartfelt appreciation to all of the Lumos employees whose dedication and hard work made our transformation possible. Additionally, I would like to thank our shareholders and customers for their support and loyalty over the past several years.”

“Our transformation would not have been possible without our debt holders, including Co-Bank and its lending consortium, and Pamplona Capital, who provided their investment capital support and expertise,” Mr. Biltz continued.

“Finally, I look forward to working with EQT Infrastructure, who fully supports our laser-focused customer-first approach, as Lumos continues to innovate and expand its network, products and service offerings to our customers.”

The agreement was approved by all members of the board of directors voting on the transaction. Completion of the transaction is subject to shareholder approval, regulatory approval and other customary closing conditions. The acquisition is expected to be completed during the third quarter of 2017.

Wells Fargo Securities, LLC and UBS Investment Bank served as co-financial advisors to Lumos Networks in connection with the transaction. Troutman Sanders LLP and Lawler, Metzger, Keeny and Logan, LLC served as legal counsel for Lumos Networks in connection with this transaction. Morgan Stanley & Co. LLC acted as exclusive financial advisor to EQT Infrastructure, and Simpson Thacher & Bartlett LLP and Morgan, Lewis, & Bockius LLP served as legal advisors to EQT Infrastructure.

Additional Information about the Proposed Transaction and Where to Find It

In connection with the proposed transaction, Lumos Networks will hold a special meeting to obtain shareholder approval in connection with the proposed transaction and will file a proxy statement with the SEC. Additionally, Lumos Networks will file other relevant materials in connection with the proposed transaction. The definitive proxy statement will be mailed to Lumos Networks’ shareholders and will contain important information about the proposed transaction and related matters. The materials to be filed by Lumos Networks with the SEC may be obtained free of charge at the SEC’s web site at WWW.SEC.GOV. In addition, investors and security holders may obtain free copies of the documents filed with the SEC by Lumos Networks on Lumos Networks’ website at WWW.LUMOSNETWORKS.COM or by contacting Lumos Networks investor relations at DAVISW@LUMOSNET.COM. INVESTORS AND SECURITY HOLDERS OF LUMOS NETWORKS ARE URGED TO READ THE PROXY STATEMENT AND THE OTHER RELEVANT MATERIALS WHEN THEY BECOME AVAILABLE BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH RESPECT TO THE PROPOSED TRANSACTION BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.

Certain Information Regarding Participants

Lumos Networks and its directors, executive officers and other persons, may be deemed to be participants in the solicitation of proxies of Lumos Networks shareholders in connection with the proposed transaction. Information concerning the interests of Lumos Networks’ participants in the solicitation, which may, in some cases, be different than those of Lumos shareholders generally, is set forth in the materials filed by Lumos Networks with the SEC, including in Lumos Networks’ definitive proxy statement filed with the SEC on March 15, 2016, and will be set forth in the proxy statement relating to the proposed transaction when it becomes available.