Windstream completes $1.1bn EarthLink merger deal
US carriers Windstream and EarthLink have completed their merger in an all-stock deal valued at $1.1 billion.
The merged company – which will be called Windstream, and will be based at Windstream’s existing headquarters in Little Rock, Arkansas – will have a US-wide footprint spanning approximately 145,000 fibre route miles.
"We are very pleased to announce the completion of our merger with EarthLink, which improves our competitiveness and ability to serve customers while increasing free cash flow and reducing leverage," said Tony Thomas, president and chief executive officer at Windstream. "Our customers will benefit from our expanded national fiber footprint and enhanced products and services, including SD-WAN, UCaaS, network security, managed services and cloud connectivity. On behalf of everyone at Windstream, we welcome EarthLink and its talented team, and look forward to a seamless transition as we continue to drive value for all of our stakeholders."
Both companies have satisfied all necessary customary closing conditions, including approval from shareholders of both Windstream and EarthLink. First announced in November, Windstream’s existing shareholders will now own 51% of the combined company. EarthLink shareholders receive 0.818 shares of Windstream common stock for each EarthLink share owned.
Tony Thomas will remain as president and CEO and Bob Gunderman will serve as CFO of the combined company. Three of EarthLink’s existing directors - Dr. Julie Shimer, Marc Stoll and Walter Turek - have been appointed to the Windstream board of directors, effective March 1, 2017. The appointments bring the total number of directors of the combined company's board to 12.
The companies said they expect annual operating and capex synergies of more than $150 million within 36 months of closing, which is an increase of $25 million from its initial estimates.