By Lisa Kerner
Charlotte, N.C., Nov. 24 - Windstream Corp. agreed to acquire Iowa Telecommunications Services, Inc. in a stock-and-cash transaction valued at approximately $1.1 billion, the companies announced on Tuesday.
Iowa Telecom shareholders will receive 0.804 shares of Windstream stock and $7.90 in cash for each Iowa Telecom share.
Both companies' boards of directors approved the deal, which is slated to close in mid-2010.
Windstream said it expects to issue approximately 26.5 million shares valued at about $269 million and to pay approximately $261 million in cash as part of the transaction.
In addition, Windstream said it will repay estimated net debt of approximately $598 million.
The cash portion of the transaction and the debt repayment will be financed using proceeds from a debt financing or additional bank borrowings, according to a Windstream news release.
Requirements for payment of a $25 million termination fee are included as part of the merger agreement, according to a form 8-K filed with the Securities and Exchange Commission.
"As the telecommunications industry changes, it has become clear that we need to increase the size and scale of our operations in order to continue to offer our customers the services they need," Iowa Telecom chairman and chief executive officer Alan L. Wells said in a company news release.
"This has been a difficult decision, but we firmly believe that the combination with Windstream is in the best interest of our company, our customers and our shareholders."
Little Rock, Ark.-based Windstream provides voice, broadband and entertainment services to customers in 16 states.
Iowa Telecom, located in Newton, Iowa, provides communications services to residential and business customers.
| Acquirer: | Windstream Corp.
|
| Target: | Iowa Telecommunications Services, Inc.
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| Announcement date: | Nov. 24
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| Price per share: | 0.804 Windstream shares and $7.90 cash
|
| Transaction total: | $1.1 billion
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| Termination fee: | $25 million
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| Expected closing: | Mid-2010
|
| Stock price for acquirer: | NYSE: WIN: $10.13 on Nov. 23
|
| Stock price for target: | NYSE: IWA: $12.69 on Nov. 23
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