LITTLE ROCK, Ark. – Windstream Corp. (NYSE:WIN, news, filings) announced today that it has completed its acquisition of Hosted Solutions Acquisition, LLC (Hosted Solutions) from ABRY Partners in an all-cash transaction valued at $310 million. Windstream financed the transaction through cash and revolving credit borrowings.
Hosted Solutions, based in Raleigh, N.C., is a leading regional data center and managed hosting provider focused on enterprise-class Infrastructure as a Service (IaaS) solutions (managed hosting, managed services, colocation, cloud computing and bandwidth) for small and medium-sized business customers as well as large enterprises.
Hosted Solutions operates five state-of-the-art SAS 70 Type II certified data centers in Raleigh, N.C.; Charlotte, N.C., and Boston and serves more than 600 customers. Windstream now operates a total of 12 data centers in eight states.
Windstream will be able to fully amortize the purchase price goodwill over 15 years, resulting in expected tax benefits with an estimated net present value of $52 million.
Windstream estimates the transaction will be accretive to free cash flow in the first year after expected annual synergies of approximately $1.5 million in operating expense savings and excluding integration charges.
The Bank Street Group LLC and Stephens Inc. acted as financial advisers and Kutak Rock LLP acted as legal adviser to Windstream on the transaction. Kirkland & Ellis LLP acted as legal adviser to ABRY Partners and Hosted Solutions.
Cautionary Statement Regarding Forward-Looking Statements
Windstream claims the protection of the safe-harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements, including statements regarding the expected benefits of the acquisition, 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 above include, among others: the possibility that the anticipated benefits from the acquisition cannot be fully realized or may take longer to realize than expected; the possibility that costs or difficulties related to the integration of Hosted Solutions operations into Windstream will be greater than expected; the ability of the combined company to retain and hire key personnel; and those additional factors under the caption “Risk Factors” in Windstream’s Form 10-K for the year ended December 31, 2009 and in subsequent Securities and Exchange Commission filings. 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 Windstream’s filings with the Securities and Exchange Commission at www.sec.gov.
Windstream Corp. (NASDAQ: WIN), headquartered in Little Rock, Ark., is an S&P 500 communications and technology company with operations in 24 states and about $4 billion in annual revenues. Windstream provides IP-based voice and data services, MPLS networking, data center and managed hosting services and communication systems to businesses and government agencies. The company also delivers broadband, digital phone and high-definition TV services to residential customers primarily located in rural areas. For more information about Windstream, visit www.windstream.com.