Windstream snaps up assets from Q-Comm

US service provider Windstream is to acquire Q-Comm, a privately held CLEC based in Kansas, in a transaction valued at $782 million.

The deal includes Q-Comm’s wholly-owned subsidiaries Kentucky Data Link (KDL), a fibre services provider in 22 states, and Norlight, a local exchange company serving the US midwest region.

"This transaction builds on Windstream’s strategy to become a next-generation telecoms provider focussed on broadband and enterprise customers,” said Jeff Gardner, president and CEO of Windstream. “KDL’s extensive fibre network creates savings for us as well as opportunities to grow business revenues, particularly transport services for wireless carriers.”

The boards of both companies have approved the transaction, which is expected to close in Q4 2010, subject to certain conditions, including necessary approvals from federal and state regulators.

KDL provides long-haul and metropolitan fibre services to a diverse base of bandwidth-intensive customers, primarily serving wireline and wireless carriers, as well as the large enterprise, government, education and medical markets. KDL’s contiguous fibre network spans nearly 30,000 fibre route miles in 22 states. It has 400 employees. Norlight is a competitive local exchange carrier that serves 5,500 small and medium size business customers in the midwest; it has 200 employees.

Windstream says it operates in sectors complementary to Q-Comm, and that combining resources in these service areas will provide significant benefits. “This deal represents further diversification of Windstream’s portfolio,” said Douglas Barnett, an analyst with Atlantic- ACM. “It’s in line with two major growth points for the industry: next-gen IP services for business and backhaul in the wholesale space. KDL adds backhaul capability, and Norlight extends its enterprise reach.”