Thriving in a Fast-Paced Industry

Simply surviving as a service provider in the rural communications industry is no mean feat. What was once a slow-moving utility business focused only on telephony voice services is now a fast-paced, rough-and-tumble industry that changes constantly with technology.

Nonetheless, Minnesota-based Arvig has found a way to not only survive, but to thrive in this challenging market environment. The family- and employee-owned company has done so by holding fast to a disciplined expansion strategy, completing 20 acquisitions over the past two decades.

“If you just sit still, you won’t survive very long because competitors will take advantage of any opportunities you pass up,” CEO Allen Arvig says.

“All of our acquisitions have been carefully pursued to enhance our existing expertise,” says Staci Malikowski, Arvig’s CFO. “In this industry, companies really need to identify what they’re good at and then spend their resources in those areas.”

Beginning in 1950 as a small, family-owned local telephone company, Arvig now serves 40,000 phone, 50,000 internet and 21,800 video customers in Iowa, Minnesota, North Dakota and South Dakota. It delivers broadband, fiber transport and backhaul, residential and business telephone, television and managed IT services.

Three generations of Arvigs fill key roles in the organization, including CEO Allen and COO David. The company has also established an employee stock ownership program, which today puts 40% of the company’s equity in employees’ hands.

Arvig remains committed to its acquisition strategy. Its most recent transaction—a $235 million purchase of a large fiber asset— was completed in late 2018. CoBank, Arvig’s longtime primary lender, fi nanced the project, along with a number of syndication partners in the Farm Credit System. The deal also enabled Arvig to refinance existing debt and provided additional liquidity.

CoBank delivers the capital we need and helps us keep our financing within Farm Credit, so we receive the additional benefit of patronage, they’re also an important strategic partner with deep industry knowledge and insight that we rely on.

In addition to acquisitions, Arvig continues to build out its member base, and to maintain and enhance its network so it can continue to deliver best-in-class broadband and entertainment services to its customers.

“Arvig understands that continued growth and diversification are essential to remaining viable. in this quickly changing industry,” says Ted Koerner, senior vice president of CoBank’s Communications division. “Their strategic investments in fiber infrastructure and acquisitions have positioned them to continue to grow. We look forward to continuing to provide them financial support.”