Windstream to acquire Iowa Telecommunications for $1.1 billion
25 Nov 2009
The US broadband and telecommunications company, Windstream Corporation has agreed to acquire Newton, Iowa-based Iowa Telecommunications Services for $1.1 billion in cash and stock.
Little Rock, Arkansas-based Windstream will take on nearly Iowa Telecom's debt of $600 million but will expand its rural footprint into Iowa and Minnesota and adds approximately 256,000 access lines, about 95,000 high-speed Internet customers and about 26,000 digital TV customers.
Iowa Telecom shareholders will receive 0.804 shares of Windstream stock and $7.90 in cash per each Iowa Telecom share under terms of the agreement approved by the boards of directors of both companies.
Windstream expects to issue approximately 26.5 million shares of stock valued at approximately $269 million, based on the company's closing stock price on 23 November 2009, and pay approximately $261 million in cash as part of the transaction.
Windstream also will repay estimated net debt of approximately $598 million. The company intends to finance the cash portion of the transaction and the repayment of Iowa Telecom's outstanding indebtedness with the proceeds from a debt financing or additional bank borrowing.
Windstream Communications is a local and long distance broadband internet and DISH Network Satellite TV services provider to customers in 16 states. The company has 3.3 million access lines in 16 states and had $3.3 billion in annual revenues in 2008.
Iowa Telecommunications Services is a local telephone, long distance, Internet, broadband and network access services provider to business and residential customers in Iowa and Minnesota and employs approximately 800 people.
