Newton Independent
Windstream Corporation, which last year completed its acquisition of Newton-based Iowa Telecom, today announced an agreement where it will acquire PAETEC Holding Corporation based in Fairport, N.Y., in a deal valued at approximately $2.3 billion.
"This transaction significantly advances our strategy to drive top-line revenue growth by expanding our focus on business and broadband services," said Jeff Gardner, president and CEO of the Little Rock, Ark.-based company. "The combined company will have a nationwide network with a deep fiber footprint to offer enhanced capabilities in strategic growth areas, including IP-based services, data centers, cloud computing and managed services. Financially, we improve our growth profile and lower the payout ratio on our strong dividend, offering investors a unique combination of growth and yield."
PAETEC shareholders will receive 0.460 shares of Windstream common stock for each PAETEC share owned under the terms of the agreement that was approved by the boards of directors of both companies. Windstream expects to issue approximately 73 million shares of stock valued at approximately $891 million.
Windstream will also assume or refinance PAETEC's net debt of approximately $1.4 billion at the time of the closing. PAETEC shareholders are expected to own approximately 13 percent of the combined company upon closing of the transaction.
The new company will serve business customers in 46 states and the District of Columbia with approximately 100,000 fiber route miles across the country. PAETEC has approximately 5,000 employees, including about 875 in the Rochester, N.Y., area. The company was founded in 1998.
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