American Broadband to acquire TelAlaska

Another family-owned rural telephone company has agreed to sell its assets to Charlotte, N.C.-based American Broadband. TelAlaska, the third largest independent phone company in Alaska, will become the latest acquisition in American Broadband’s quest to compile 100,000 access lines around the U.S.

Almost 40 years after being founded by the Rhyner family, it will become a subsidiary of American Broadband and join the family of companies that included Rye Telephone Co. and South Park Telephone in Colorado; Oregon Farmers’ Mutual Telephone Co.; and HunTel Telephone, Dalton Telephone and Elsie Telephone in Nebraska.

“What we liked about this was the ability to build a partnership with the Rhyners for an orderly transition to a new ownership group that would operate the company in a way that would continue the legacy of service they established,” said Patrick Eudy, CEO of American Broadband. “That’s the genesis for most of our deals. We buy smaller companies that can benefit from being part of a larger company and whose owners are really interested in what happens to the company post closing.”

Eudy also said that he generally buys companies that are the smallest, most rural and face the greatest challenges delivering voice and broadband services. “Certainly TelAlaska fits that bill. It’s really amazing the obstacles they face and surmount every day just to deliver voice services,” he said.

TelAlaska currently serves communities across the Aleutians, the Bearing Sea and in Alaska’s interior. The financial terms of the deal were not disclosed.

Both Jack Rhyner, TelAlaska CEO, and his wife and chief information officer, Donna Rhyner, will leave the company. Jack Rhyner, whose father founded the company, plans to be a consultant on regulatory and public policy issues. He is past president of the Alaska Telephone Association and serves on the Board of Directors and chairs the ATA Government Affairs Committee.

Eudy said the existing executive management team will run the business.

TelAlaska runs with several operating companies. Interior Telephone provides service to Seward, Moose Pass, Cooper Landing, Iliamna, Unalaska/Dutch Harbor, Sand Point, Port Lions, King Cove, Cold Bay, Galena and Fort Yukon. Mukluk Telephone—acquired in 1992—serves Nome, Diomede, Brevig Mission, Council, Elim, Golovin, Koyuk, Teller, St. Michael, Shaktoolik, Shishmaref, Stebbins, Wales and White Mountain.

TelAlaska itself also includes TelAlaska Long Distance, Eyecom Cable and TelAlaska NetWorks. Only four of the 25 Alaskan communities served by Interior and Mukluk are accessible by road.

American Broadband so far has been fairly geographically diverse in its selection of companies to acquire. Eudy said that there are advantages to being part of a bigger company, but that scale was not necessarily one of them since its strategy does not include the centralization of operations among its assets. “We think it is extremely important that these companies are operated locally and that customers are serviced by people located in their geography. You get better customer service and a more timely response to customer needs. The human element in these areas becomes really critical,” Eudy said.

Instead, American Broadband tries to get companies to work cooperatively. “It is not our focus to find all the hardest places on earth to acquire companies? But we don’t shy away from that challenge,” Eudy said. “We try to get the companies to leverage each others’ strengths.”

He pointed to HunTel Telephone as an example. “They have an excellent Internet operation and most other companies were outsourcing Internet services. So now they have become a center of expertise within the American Broadband family of companies in the delivery of Internet services. That’s not something that is geographically constrained,” Eudy said.