Consolidated Communications Holdings entered into a definitive agreement to acquire FairPoint Communications, a business and broadband communications provider, in an all-stock merger transaction valued at approximately $1.5 billion, including debt.

Consolidated Communications has secured committed debt financing in conjunction with the acquisition that, in addition to cash on hand or other sources of liquidity, will be used to refinance FairPoint debt and pay fees and expenses associated with the transaction. Consolidated received financing commitments from Morgan Stanley Senior Funding, MUFG, TD Securities and Mizuho Bank.

As of September 30, 2016, FairPoint had net debt of approximately $887 million. The combined net debt of the combined company will be approximately $2.3 billion, which represents a 3.8x net leverage as of September 30, 2016, down from Consolidated’s 4.4x net leverage as of September 30, 2016.

Morgan Stanley acted as lead financial advisor on the transaction and rendered a fairness opinion to the board of directors of Consolidated Communications. Wells Fargo Securities and Foros acted as additional financial advisors and Schiff Hardin acted as legal advisor to Consolidated Communications. Evercore acted as the sole financial advisor to FairPoint. Paul Hastings acted as legal advisor to FairPoint.

The agreement and the proposed merger have been unanimously approved by the boards of directors at both companies.

“This transaction combines two companies with extensive fiber networks and complementary strategies focusing on being the leading business and broadband solutions provider,” said Bob Udell, president and chief executive officer of Consolidated Communications. “This merger positions Consolidated to leverage its extensive product and services portfolio and consultative sales approach across 24 states bringing advanced solutions and a better experience to customers.”

After the transaction closes, Udell will continue to serve as president and chief executive officer of the combined company and one director from the FairPoint board will join the Consolidated Communications board of directors.