Iowa Telecom to Buy Sherburne Tele Systems

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By Becky Ogann

Story Created: Nov 21, 2008 at 12:19 PM CST

Story Updated: Nov 21, 2008 at 12:19 PM CST

NEWTON (AP) - Newton-based Iowa Telcommunications Services Inc. says it has agreed to buy Sherburne Tele Systems Inc. for more than $80 million.

The deal is subject to regulatory approvals and is expected to close in the first half of 2009.

Sherburne is a Big Lake, Minn.-based telephone provider with high-speed Internet and video services in nine communities north and northwest of the Twin Cities. It generated revenue of $29.4 million in 2007.

To fund the $80.6 million purchase, Iowa Telecom has arranged a $75 million loan through the Rural Telephone Finance Cooperative. The remaining amount will come from the company's existing $100 million credit agreement.

This is Iowa Telecom's second Minnesota acquisition this year.

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