NOVEMBER 3, 2009, 10:38 A.M. ET Windstream Buys Another Rural Carrier
By ROGER CHENG Wall Street Journal http://online.wsj.com/article/SB10001424052748703740004574513403848925032.html Phone company Windstream Corp. agreed to acquire NuVox Inc. for $463 million, another illustration of the consolidation in the rural telecommunications industry. Since May, Windstream has scooped up three smaller rural telcos in deals with a combined value of more than $1.1 billion, including the assumption of debt. For privately held NuVox, Windstream will pay $280 million in cash, issue $183 million in stock and assume $180 million in debt. The company plans to use its existing cash and tap its revolving credit line to fund the deal. NuVox, Greenville, S.C., brings to the table operations in 16 states and roughly 90,000 business customers. Windstream, Little Rock, Ark., operates in 16 states and boasts three million access lines. Windstream and other rural telcos are scrambling to buy up each other to boost size and pass their sizeable capital expenditures across a wider base of customers and gain purchasing power when buying telco gear. The telcos continue to face pressure as cable providers poach customers with their own rival phone services, while other consumers cancel their lines to go solely with the cellphones. NuVox also brings a sizeable business presence for Windstream. "This transaction significantly advances our strategy to grow broadband and business revenues, which is important given the growth prospects in these areas," Windstream Chief Executive Jeff Gardner said in a statement. The deal is projected to save $30 million in annual operating expenses and capital expenditures, the company said. It is expected to add free cash flow in the first full year of combined operation, as well as lower its dividend payout ratio. The boards of both companies have approved the deal. In May, Windstream entered into an agreement to buy D&E Communications Inc. for $159 million in cash and stock, in addition to absorbing $171 million in debt. In September, the company agreed to buy Lexcom Inc. for $141 million in cash. ================================================= George Antunes Voice (713) 743-3923 Associate Professor Fax (713) 743-3927 Political Science Internet: antunes at uh dot edu University of Houston Houston, TX 77204-3011 *********************************** * POST TO [email protected] * *********************************** Medianews mailing list [email protected] http://lists.etskywarn.net/mailman/listinfo/medianews
