New Ulm Telecom, Inc. announced recently that Hector Communications Corporation, a diversified telecommunications company, and its three owners/shareholders: Arvig Enterprises, Inc., Blue Earth Valley Communications, Inc. and New Ulm entered into a spin-off agreement under which Hector would distribute its independent local exchange company subsidiaries to its three owners/shareholders.
Hector currently owns a total of 12 telecommunications companies, including nine local exchange telephone companies, with customers located in Minnesota, North Dakota and Wisconsin.
The spin-off transaction is subject to approval of the Minnesota Public Utilities Commission (“MPUC”). As previously announced, on Nov. 5, 2012, the Hector parties filed a joint petition with the MPUC for the spin-off of the assets. The transaction is expected to close prior to year-end.
Under the spin-off agreement, New Ulm would receive 100 percent of the Sleepy Eye Telephone Company (SETC) stock. SETC currently serves customers in Southern Minnesota, near or adjacent to New Ulm’s existing operations, which include customers in Southern Minnesota and northern Iowa.
New Ulm’s President and Chief Executive Officer, Bill Otis remarked, “We are excited to be acquiring SETC as part of this transaction. We believe that with this spin-off, we will be able to bring to SETC customers, the same high-quality services we have delivered to our existing communications customer base.”
Those services include digital television, internet and voice exchange, according to Otis.
Otis explained that Hector currently owns SETC, which is owned by New Ulm. “Historically,” Otis said, “New Ulm has already been managing and running the SETC location.” He advised that there will be no changes in employee status or services SETC offers.
Otis added that because New Ulm is a public company they are required by law to let their shareholders know of any changes within the company, which is the reason for the announcement.