Windstream to Buy NuVox of South Carolina in $643 Million Deal

by Arkansas Business Staff  on Tuesday, Nov. 3, 2009 7:48 am  

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.

NuVox

NuVox, a competitive local exchange carrier, offers IP-based voice and data services to about 90,000 business customers. It has about 1,700 employees, including about 700 in Greenville.

Windstream said it expects to keep "a significant employment presence in Greenville" to manage sales and service for the company's combined competitive local exchange properties after the deal closes.

For the 12 months ending June 30, NuVox generated $561 million in revenue and $115 million in operating income before depreciation and amortization.

Windstream is an S&P 500 company that provides phone, high-speed Internet and high-definition digital TV services in 16 states. The company also offers IP-based voice and data services and advanced phone systems and equipment to businesses and government agencies.

 

 

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