In mid-October, an article appeared in a premium-membership edition of The Wall Street Journal, breaking the news that a Louisiana telecommunications company might soon be bought, with the headline proclaiming, “Family-Owned Eatel Explores a Sale.”
The prospect wasn’t all that surprising. In an industry rife with mergers and acquisitions, Eatel—a small, yet profitable company with a sizable fiber network—seemed the ideal prey, waiting to be gobbled up by bigger players hungry for a good deal. Local analysts had expected as much for years.
What came next, though, left onlookers scratching their heads. The entity that would end up buying Eatel was not some large, out-of-state competitor, nor was a private equity firm with its sights set on the company. Rather, in a case of the tiny buying the small, it was RTC—a little known Reserve-based telecom provider—that was acquiring Eatel. But something didn’t add up.
The secret behind the deal was that Sean and Kevin Reilly, who run the Lamar Advertising Company empire, have been quietly involved with RTC for two decades, initially teaming with a venture fund that acquired it in 1998 and then buying the company outright in 2007.
Not ones to micromanage, the brothers have for years kept a low profile when it comes to RTC, but the Eatel deal—right in their own backyard—was one they didn’t want to pass up, and the timing was right to make their move.
“Our family is interested in private equity, buying businesses and holding them forever,” Kevin Reilly continues. “For the last few years, we had a negative point of view regarding evaluations and government intervention into the economy, so we were sitting on the sidelines. After waiting patiently for five years, it took minutes to make the decision.”