Windstream Corp. of Little Rock said Tuesday that it has entered into a definitive agreement to acquire NuVox Inc., a privately held local exchange carrier based in Greenville, S.C., in a deal worth about $643 million.
The publicly traded telecommuncations firm (NYSE: WIN) said the deal will add about 90,000 business customers in 16 markets across the Southeast and Midwest.
"This transaction significantly advances our strategy to grow broadband and business revenues, which is important given the growth prospects in these areas," Jeff Gardner, president and CEO of Windstream, said in a news release.
"NuVox has a strong performance record of growing revenues and improving margins and offers the potential for continued business growth," he said.
NuVox has been a minor player in the Arkansas telecom market. It was No. 24 on Arkansas Business' most recent list of the state's largest local exchange carriers, with $1.8 million in Arkansas assessable revenue in 2008 and 5,761 business lines and 11 employees in the state as of Dec. 31.
The Deal
The deal is expected to close in the first half of 2010, subject to regulatory approval. The boards of both companies have already approved the deal.
Windstream said it will issue 18.7 million common shares, pay $280 million in cash and assume about $180 million in NuVox debt. Windstream estimates the deal will be accretive to free cash flow after expected annual synergies of about $30 million in operating expenses and capital expenditure savings.
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