Mid-Maine to sell for $37M Ala. firm plans to wade into Maine market with purchase

BANGOR – A local telecommunications company is being sold to an Alabama-based firm for more than $37 million.

Gary Sugarman, chairman of Mid-Maine Communications, said Tuesday the company he founded 12 years ago is being sold to Otelco, a publicly traded company that provides traditional telephone services in parts of Alabama and Missouri.

Sugarman, who will leave Mid-Maine after the sale is complete, said the company has not been on the market.

“We weren’t planning to do this,” he said, sitting in a small office at the company’s headquarters at the corner of Hammond Street and Odlin Road. “They contacted us. We felt we would not be doing our job if we didn’t take a look at it.”

The sale price, according to documents filed with the federal Securities and Exchange Commission, is $37.75 million.

Mid-Maine offers complete telephone, Internet and high-speed data transmission services, Sugarman said. It has approximately 100 employees and operates out of offices in Bangor and Portland.

In a prepared statement about the sale, Otelco President and CEO Mike Weaver said the acquisition is “strategically important” for Otelco. He noted that both firms have roots as rural wireline telephone service providers and that Mid-Maine’s management team, including CEO Nick Winchester, will continue to lead the company’s operations after the sale is complete.

“We also believe expansion opportunities exist in the New England area and that the Mid-Maine acquisition can be the catalyst for growth in this part of the country,” Weaver indicated in the release.

Curtis Garner, chief financial officer for Otelco, said Tuesday there should be a rising demand over the next several years in rural areas for high-speed Internet access. He said Maine “seemed like a good place to start” serving this demand in New England.

As for new services, changes in staffing levels, or a possible new company name, Garner said Otelco has no plans. He said if there were any job consolidations, it likely would be with Mid-Maine’s financial functions.

“I don’t have anything off the top of my head that we would jump in with and immediately change,” Garner said.

Otelco, headquartered in Oneonta, Ala., acquired Mid-Missouri Telephone Company of Pilot Grove, Mo., in 2004, according to Hoover’s online business information service. Besides local and long-distance telephone service, Otelco provides network and Internet access and is in the cable television market.

According to Sugarman, Otelco is acquiring about 20,000 access lines with the purchase of Mid-Maine, bringing Otelco’s total to around 51,000.

Sugarman said the sale should not have any significant effect on Mid-Maine’s employment levels. Nor should it present any discernable difference for its customers.

“There’s nothing that says to us there’s a consolidation underway,” he said. “[Customers] should see no changes.”

Mid-Maine was founded in 1994 when GTE decided to pull out of Maine, according to Mid-Maine’s official Web site. It started by offering telephone services in 26 communities surrounding Bangor and began offering Internet access service in 1997.

Over the past five years Mid-Maine has spent $18 million on improvements to its network, which includes a high-speed fiber optic telecommunications system that stretches from Ellsworth to Portland. The firm generated approximately $22 million in revenue in 2005.

Sugarman said he expects the acquisition to take anywhere from three to six months to become final, depending on regulatory approvals.

Up until now, Mid-Maine has been owned by Sugarman, Boston private equity firm Alta, and the Costello family, which also owns the Lewiston Sun Journal and Falmouth-based Forecaster newspapers, Sugarman said.