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Tuesday, November 24, 2009

Windstream To Buy Iowa Telecom For $1.1 Billion

By Jeffry Bartash

MarketWatch Pulse

WASHINGTON - Local-phone company Windstream Corp. on Tuesday said it will buy Iowa Telecommunications Services Inc. in a deal worth $1.1 billion, including the assumption of debt. Under the agreement, Windstream will issue 0.804 shares and $7.09 in cash for each share of Iowa Telecom , which reflects a total price of about $16.14 a share or a 26% premium. Iowa Telecom, which closed Monday at $12.69, leaped as much as 24% to $15.71 in early Tuesday trades. As part of the deal, Windstream will also assume $598 million in Iowa Telecom debt. "These are well-run, profitable properties in very rural service areas that expand our presence in the Upper Midwest and grow our free cash flow per share," Windstream CEO Jeff Gardner said in a statement. The purchase, which Windstream aims to complete in the first half of 2010, will begin to add to earnings in the first year following the acquisition, the company said.

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