NOVEMBER 24, 2009 -- Iowa Telecommunications Services Inc. has announced that its board of directors has approved an agreement for Windstream Corp. to acquire the Newton, IA-based telecommunications company in a transaction valued at approximately $1.1 billion.
Iowa Telecom provides communications services to residential and business customers in approximately 460 Iowa and Minnesota communities. The company has approximately 800 employees and serves about 256,000 access lines, about 95,000 high-speed Internet customers, and about 26,000 digital TV customers.
"For the past 10 years, Iowa Telecom has been committed to providing advanced communications services to our customers," says Alan L. Wells, Iowa Telecom chairman and chief executive officer. "Our dedicated employees have helped create a solid reputation with our customers and within the communities we serve. As the telecommunications industry changes, it has become clear that we need to increase the size and scale of our operations in order to continue to offer our customers the services they need. This has been a difficult decision, but we firmly believe that the combination with Windstream is in the best interest of our company, our customers, and our shareholders."
Iowa Telecom shareholders will receive 0.804 shares of Windstream stock and $7.90 in cash per each Iowa Telecom share under terms of the agreement approved by the boards of both companies. Windstream expects to issue approximately 26.5 million shares of stock valued at $269 million, based on the company's closing stock price on Nov. 23, 2009, and pay approximately $261 million in cash as part of the transaction. Windstream also will repay estimated net debt of approximately $598 million.
"Iowa Telecom's commitment to meeting the communications needs of its customers, and its focus on customer service, has resulted in solid operating and financial results. These are well-run, profitable properties that offer a unique opportunity to expand our operations into Iowa and Minnesota," says Jeff Gardner, president and chiefe executive officer of Windstream.
Little Rock, AR-based Windstream provides voice, broadband, and entertainment services to customers in 16 states. Similar to Iowa Telecom, Windstream has a reputation for being very involved in its local communities. Windstream will maintain an operating presence in the headquarters building in Newton and plans to expand the existing Newton call center.
"Windstream has an impressive track record of serving customers in communities similar to the ones we serve. Windstream is a leader in our industry, and has a reputation for deploying advanced services," adds Wells. "We're pleased that we've found a company to partner with that is as committed to customer service as we have been."
The transaction is expected to close in mid-2010, subject to certain conditions, including necessary approvals from federal and state regulators and Iowa Telecom shareholders.
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