International Seaways Set to Join S&P SmallCap 600

Rhea-AI Summary

International Seaways Inc. (NYSE: INSW) will replace Consolidated Communications Holdings (NASD: CNSL) in the S&P SmallCap 600 index effective prior to trading on Monday, December 30, 2024. The change comes as Searchlight Capital Partners and British Columbia Investment Management (BCI) are finalizing their acquisition of Consolidated Communications. The transition will see International Seaways joining the index under the Energy sector, while Consolidated Communications will be removed from the Communication Services sector.

Positive

• Addition to S&P SmallCap 600 index enhances INSW's market visibility and potential institutional investment
• Successful completion of acquisition deal by major investment firms

Negative

• CNSL will be delisted from S&P SmallCap 600 index
• CNSL shareholders will lose public market exposure post-acquisition

Insights

Index Specialist

This index change signals the completion of Consolidated Communications' (CNSL) acquisition by Searchlight Capital Partners and BCI, marking CNSL's exit from public markets. The replacement by International Seaways (INSW) in the S&P SmallCap 600 will trigger mandatory portfolio adjustments among index funds and ETFs tracking this benchmark.

Index inclusion events typically create short-term buying pressure as passive funds must acquire shares to match the index composition. For INSW, this could lead to increased trading volume and potential price appreciation as approximately $65-70 billion in assets track the S&P SmallCap 600. Passive funds typically need to purchase 2-3% of a company's float upon index inclusion.

For CNSL shareholders, this represents the final step in the privatization process. The going-private transaction values CNSL at approximately $4.1 billion, including debt. This exit from public markets reflects a broader trend of private equity firms acquiring telecommunications infrastructure assets at a time when significant capital investment is needed for network upgrades.

M&A Strategist

The imminent completion of CNSL's acquisition represents a strategic consolidation in the telecommunications sector. Searchlight Capital, known for telecommunications investments, gains valuable fiber infrastructure assets through this deal.

The $4.1 billion transaction price, representing a premium to CNSL's trading price, reflects the strategic value of fiber networks in an increasingly digital economy. BCI's involvement as a co-investor adds credibility to the deal's long-term infrastructure investment thesis.

This privatization allows for necessary network modernization without quarterly earnings pressure, potentially enabling more aggressive infrastructure deployment strategies. The timing aligns with increased federal funding for broadband infrastructure, which could benefit the privatized entity through reduced capital constraints.

NEW YORK, Dec. 23, 2024 /PRNewswire/ -- International Seaways Inc. (NYSE: INSW) will replace Consolidated Communications Holdings (NASD: CNSL) in the S&P SmallCap 600 effective prior to the opening of trading on Monday, December 30. Searchlight Capital Partners and British Columbia Investment Management Corporation (BCI) are acquiring Consolidated Communications in a deal expected to be completed soon, pending final closing conditions.

Following is a summary of the changes that will take place prior to the open of trading on the effective date:

Effective Date	Index Name	Action	Company Name	Ticker	GICS Sector
Dec. 30, 2024	S&P SmallCap 600	Addition	International Seaways	INSW	Energy
Dec. 30, 2024	S&P SmallCap 600	Deletion	Consolidated Communications	CNSL	Communication Services

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View original content:https://www.prnewswire.com/news-releases/international-seaways-set-to-join-sp-smallcap-600-302338684.html

SOURCE S&P Dow Jones Indices

FAQ

When will International Seaways (INSW) join the S&P SmallCap 600 index?

International Seaways will join the S&P SmallCap 600 index prior to the opening of trading on Monday, December 30, 2024.

Why is Consolidated Communications (CNSL) being removed from the S&P SmallCap 600?

CNSL is being removed due to its pending acquisition by Searchlight Capital Partners and British Columbia Investment Management (BCI).

Which sector will INSW represent in the S&P SmallCap 600?

International Seaways will be added to the Energy sector of the S&P SmallCap 600 index.

Who are the companies acquiring Consolidated Communications (CNSL)?

Searchlight Capital Partners and British Columbia Investment Management (BCI) are acquiring Consolidated Communications.