EarthLink To Be Bought Out By Windstream In a $1.1 Billion Stock Deal, Including Debt

By Markets MarketWatch Pulse

Windstream Holdings Inc. announced Monday a deal to buy fellow network services company EarthLink Holdings Corp. in a stock deal valued at $1.1 billion, including debt. Under terms of the deal, EarthLink shareholders will received 0.818 Windstream shares for each EarthLink share they own. Based on Friday's closing prices, that values EarthLink shares at $5.92 each, or a 4.8% discount. The deal values EarthLink at about $624.6 million. EarthLink's stock soared 15% on Friday after reports of merger talks. After the deal closes, which is expected in the first half of 2017, the combined company will retain the Windstream name. Windstream will issue 93 million shares of stock valued at $673 million to finance the deal. EarthLink's stock, which was still inactive in premarket trade, went public during the internet boom in March 1996, and rose as high as $62.47 in April 1999, but hasn't closed above $10 since June 2008. It has shed 16% year to date, while Windstream shares have gained 12% and the S&P 500 has tacked on 2%.

Continue Reading Below

Copyright © 2016 MarketWatch, Inc.