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Windstream to acquire Paetec Holding
02 August 2011
Windstream to expand business and broadband services
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Windstream
Paetec
US phone company Windstream is to acquire Paetec Holding, which offers telecommunications services to businesses. Windstream will pay around $891 million in stock for the acquisition.
The acquisition of Paetec Holding will enable Windstream to expand its emphasis on broadband and business services. Windstream has a total of three million phone lines across 29 states, with majority in rural regions.
Under the deal, Paetec shareholders will receive 0.460 shares of Windstream common stock for every Paetec share. Windstream will also refinance or assume around $1.4 billion in Paetec debt.
The acquisition will result in 70% of Windstream's revenues coming from broadband and business services. The annual revenue of the combined firm will be $6.1 billion, with 13% of the revenues to be owned by Paetec shareholders.
The completion of the deal is anticipated within six months.
David Dixon, an analyst at FBR Capital Markets, does not rule out the possibility of a competing offer from internet service provider EarthLink or long-haul data carrier Level 3 Communications. GTB