Story Created:
Nov 24, 2009 at 1:47 PM CDT
Story Updated:
Nov 24, 2009 at 1:47 PM CDT
NEWTON -
Iowa Telecommunications Services, Inc. of Newton has agreed to be acquired by Arkansas-based
Windstream Corp. in a $1.1 billion stock and cash transaction.
Windstream Corp. of Little Rock, Ark., has agreed to exchange 0.804 shares of its own stock and $7.90 in cash for each share of Iowa Telecom stock. It will also pay $598 million of Iowa Telecom’s debt as part of the agreement.
Iowa Telecom Chairman and CEO Alan Wells said it became clear in recent years that Iowa Telecom had to increase the size and scale of its operations in order to provide customers with the services they want.
“This is an excellent transaction for our shareholders, and for the customers that we serve,” Wells said in a prepared statement. He called Windstream a leader in the telecommunications industry, and praised Windstream’s leadership for growing their business during challenging times.
Iowa Telecom serves 460 Iowa and Minnesota communities with about 256,000 access lines, 95,000 high-speed Internet accounts and 26,000 digital television accounts.
Windstream said the deal is expected to result in a lowered dividend payout rate, but will be favorable to cash flow and leave its balance sheet in solid shape. The transaction is expected to close in mid-2010.
Shares of Iowa Telecom shot up $3.16, or nearly 25 percent to $15.86 in early trading on the news.
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