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Windstream to buy Iowa Tel for $1.1bn
25 November 2009
Former Alltel landline unit Windsteam continues its acquisitive habit by buying Iowa Telecom for $1.1 billion
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[Windstream]
[Alltel]
[Iowa]
[CenturyTel]
[Embarq]
Comment: As the giants — particularly AT&T and Verizon — get more powerful in the US market the little guys are banding together. CenturyTel has merged with Embarq — which used to be Sprint’s fixed network division — and now Windstream, hived off from Alltel three years ago, is building a rural network.
US regional operator Windstream is acquiring Iowa Telecommunications for $1.1 billion in a cash and stock deal.
The Arkansas-based phone company will take on nearly $600 million in Iowa Telecom debt, as per the deal.
The acquisition will expand Windstream’s operations into Iowa and Minnesota, adding nearly 256,000 phone lines, 95,000 high-speed Internet customers and 26,000 video subscribers.
Windstream — which shows a green pick-up truck on its annual report and its website — was formed in 2006 through the spinoff of Alltel’s landline business and merger with Valor Telecom.
Iowa’s shareholders will get 0.804 shares of Windstream stock and $7.90 in cash for each share they own. Windstream will pay $261 million and will finance the cash portion of the transaction.
The transaction, which is expected to close in mid-2010, is subject to state and federal regulatory approval. Alan Wells, Iowa Telecom’s chairman and CEO, will join Windstream’s board after the deal.
The move comes only two weeks after Windstream completed the acquisition of a Pennsylvania operator, D&E Communications, in a transaction valued at $333 million. GTB