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7. Eduardo Mestre, Michael Price and Team / Evercore Partners

When Frontier Communications Corp. asked Evercore Partners to advise it on acquiring some 4.8 million access lines from Verizon Communications, Evercore’s senior team resolved that the $8.6 billion all-stock transaction would not echo previous deal failures in the telecom sector.

When Frontier Communications Corp. asked Evercore Partners to advise it on acquiring some 4.8 million access lines from Verizon Communications, Evercore’s senior team resolved that the $8.6 billion all-stock transaction would not echo previous deal failures in the telecom sector.

Earlier consolidation plays had been beset with integration problems, and the acquiring company had too often been left weakened. Evercore’s Michael Price — a senior managing director and head of the firm’s technology and telecom group — and vice chairman Eduardo Mestre understood the company and the sector well. Mestre, 61, had known Frontier CFO Donald Shassian for more than a decade, having worked with him on the sale of Southern New England Telecommunications Corp. to SBC Communications in 1998.

Stamford, Connecticut–based Frontier was being tracked by an undisclosed third party while it sought a deal with Verizon, so Evercore and co-adviser Citigroup felt extra pressure to maximize value for shareholders. Their strategy called for Verizon to create a separate entity, SpinCo, which held the assets in the 14 states that were subject to the takeover. After clearing SpinCo’s $3 billion of debt, New York–based Verizon spun the entity off to shareholders, and SpinCo immediately merged into Frontier. “One of the hardest aspects of this transaction was to analyze what the combined company would look like when the business we were buying did not exist as a separate entity,” Price says.

Achieving the right capital structure was key to guaranteeing a successful transaction and avoiding the pitfalls of previous deals. Price, 53, says the advisers did this by ensuring that the combined company’s balance sheet would approach investment-grade and that the systems conversions were well understood. To get things right, they reserved the option to delay closing.

“We had the comfort that Frontier was a large company with an experienced management team that had been through acquisitions before,” Price recalls. “The improvement in the dividend payout ratio contributed to the improved financial condition of the enlarged Frontier.”

Evercore kept the senior team of Mestre, Price and managing director Daniel Mendelow on the account; Mestre describes this as a hallmark of his firm. “Overall, this transaction typified the Evercore approach in that we assigned three senior people to the client and they worked through the problem from inception to completion,” he says.

Evercore and Citi each received $18 million, according to Freeman & Co. Freeman estimates that JPMorgan and Barclays Capital, which acted as joint advisers to Verizon, earned a combined $36.8 million.

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