LITTLE ROCK, Ark. – Windstream Corp. (NYSE:WIN, news, filings) announced today that it has completed its acquisition of Iowa Telecommunications Services, Inc. in a transaction valued at approximately $1.2 billion.
Iowa Telecom shareholders received 0.804 shares of Windstream stock and $7.90 in cash per each Iowa Telecom share in the transaction. Windstream issued approximately 26.7 million shares of stock valued at $284 million, based on the company’s closing stock price on May 28, 2010, and paid approximately $260 million in cash as part of the transaction. Windstream also repaid all of Iowa Telecom’s outstanding debt, which was approximately $613 million.
A final interim dividend declared by Iowa Telecom’s board of directors on May 18, 2010, will be paid as soon as possible to the Iowa Telecom shareholders of record as of the close of business May 28, 2010. The dividend will be $0.1389890 per share.
As of March 31, 2010, Iowa Telecom provided service to approximately 249,000 access lines, 96,000 high-speed Internet customers and 27,500 digital TV customers in Iowa and Minnesota. The completion of the acquisition will provide the company with increased scale and annual synergies of approximately $35 million in operating expenses and capital expenditure savings. The transaction also includes tax assets with an estimated net present value of approximately $130 million.
Iowa Telecom Chairman and CEO Alan Wells was appointed to the Windstream board of directors effective with the closing of the transaction.
Windstream Corp. (NASDAQ: WIN), headquartered in Little Rock, Ark., is an S&P 500 company with communications operations in 23 states and about $4 billion in annual revenues. Windstream provides phone, high-speed Internet and high-definition digital TV services. The company also offers a wide range of IP-based voice and data services and advanced phone systems and equipment to businesses and government agencies. For more information about Windstream, visit www.windstream.com.
Windstream claims the protection of the safe-harbor contained in the Private Securities Litigation Reform Act of 1995 for forward-looking statements set forth in this press release. These forward-looking statements include statements regarding the anticipated synergies and capital expenditure savings resulting from the transaction with Iowa Telecom. Forward-looking statements are subject to uncertainties that could cause actual future events and results to differ materially from those expressed in the forward-looking statements. These forward-looking statements are based on estimates, projections, beliefs, and assumptions that Windstream believes are reasonable but are not guarantees of future events and results. Actual future events and results of Windstream may differ materially from those expressed in these forward-looking statements as a result of a number of important factors.
Factors that could cause actual results to differ materially from those contemplated in our forward-looking statements include, among others:
- further adverse changes in economic conditions in the markets served by Windstream;
- the extent, timing and overall effects of competition in the communications business;
- continued access line loss;
- the impact of new, emerging or competing technologies;
- the adoption of intercarrier compensation and/or universal service reform proposals by the Federal Communications Commission or Congress that results in a significant loss of revenue to Windstream;
- the risks associated with the integration of acquired businesses or the ability to realize anticipated synergies, cost savings and growth opportunities;
- unexpected adverse results related to our data center migration;
- adverse effects on the availability, quality of service and price of facilities and services provided by other incumbent local exchange carriers on which our competitive local exchange carrier services depend;
- the availability and cost of financing in the corporate debt markets;
- the potential for adverse changes in the ratings given to Windstream’s debt securities by nationally accredited ratings organizations;
- the effects of federal and state legislation, and rules and regulations governing the communications industry;
- material changes in the communications industry that could adversely affect vendor relationships with equipment and network suppliers and customer relationships with wholesale customers;
- unexpected results of litigation;
- unexpected rulings by state public service commissions in proceedings regarding universal service funds, intercarrier compensation or other matters that could reduce revenues or increase expenses;
- the effects of work stoppages;
- the impact of equipment failure, natural disasters or terrorist acts;
- earnings on pension plan investments significantly below our expected long term rate of return for plan assets;
- changes in federal, state and local tax laws and rates; and
- those additional factors under the caption “Risk Factors” in Windstream’s Form 10-K for the year ended Dec. 31, 2009, and in subsequent filings with the Securities and Exchange Commission.
In addition to these factors, actual future performance, outcomes and results may differ materially because of more general factors including, among others, general industry and market conditions and growth rates, economic conditions, and governmental and public policy changes.
Windstream undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The foregoing review of factors that could cause Windstream’s actual results to differ materially from those contemplated in the forward-looking statements should be considered in connection with information regarding risks and uncertainties that may affect Windstream’s future results included in filings by Windstream with the Securities and Exchange Commission at www.sec.gov.
David Avery, 501-748-5876
Mary Michaels, 501-748-7578