Windstream agrees deal for PAETEC
Communications and technology solutions provider Windstream has agreed a deal worth $2.3 billion to acquire telco PAETEC.
The takeover will see Windstream strongly enhance its position in the US market, giving it more than $6 billion in revenues and creating a nationwide network with approximately 100,000 fibre route miles.
As part of the move, Windstream will also will assume or refinance PAETEC’s net debt, thought to be approximately $1.4 billion.
Windstream’s president and CEO Jeff Gardner said the transaction expands the company’s focus on business and broadband services.
“The combined company will have a nationwide network with a deep fibre footprint to offer enhanced capabilities in strategic growth areas, including IP-based services, data centres, cloud computing and managed services,” he said.
“Financially, we improve our growth profile and lower the payout ratio on our strong dividend, offering investors a unique combination of growth and yield.”
The acquisition is expected to be completed within six months after which Windstream will have access to business customers in 46 states and be able to extend its data centre services across the US. Approximately 70% of the company’s revenues will stem from business and broadband services.
“Both PAETEC and Windstream are built on a customer and employee-focused culture. Together, with far denser network assets, an expansive fibre infrastructure, and larger data centre footprint, I believe our brightest days are ahead,” said Arunas Chesonis, chairman and CEO, PAETEC.
“Our combination now creates a new Fortune 500 company with the financial strength and scale to compete and win against any other provider in the industry.”