FBR Capital Upgrades Shenandoah Telecommunications (SHEN) to Outperform

FBR Capital upgraded Shenandoah Telecommunications (NASDAQ: SHEN) from Market Perform to Outperform with a price target of $40.00 (from $33.00) after the company announced it had entered into an agreement (approved by both boards) to acquire regional operator, NTELOS Holdings Corp., for $9.25 in cash, for a total equity value of ~$208M plus debt.

Analyst David Dixon commented, "This represents a valuation of ~5.5x on 2016E consensus EV/EBITDA before synergies and is a fair price for NTLS shareholders as it removes the funding uncertainty associated with the cost to manage capacity for Sprint and NTLS customers in region under a fixed SNA agreement independent of usage. Shentel will fund the acquisition with $960M in credit facilities. We provide a summary of the expected transaction benefits to Shentel shareholders. The deal is expected to close in early 2016; we see no regulatory hurdles with the transaction."

For an analyst ratings summary and ratings history on Shenandoah Telecommunications click here. For more ratings news on Shenandoah Telecommunications click here.

Shares of Shenandoah Telecommunications closed at $36.07 yesterday.

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