US fixed-line operator Windstream has entered into a definitive agreement to acquire US CLEC NuVox, in a transaction valued at approximately USD 643 million. Windstream expects to issue approximately 18.7 million fixed shares of stock valued at USD 183 million, based on Windstream's closing stock price on 2 November, and pay approximately USD 280 million in cash as part of the transaction. Windstream also will assume estimated net debt of approximately USD 180 million. Windstream intends to finance the acquisition with existing cash and current capacity on its revolving credit agreement. Broadband and business revenues will represent more than half of Windstream's total revenue after the transaction closes. Additionally, NuVox's complementary footprint allows Windstream to strengthen its presence across the Southeast and Midwest, providing expanded reach to focus on small and medium business growth opportunities. Windstream estimates the transaction will be accretive to free cash flow after expected annual synergies of approximately USD 30 million in operating expenses and capital expenditure savings. Windstream expects to maintain a significant employment presence in Greenville to manage sales and service for the company's combined competitive local exchange properties after the transaction closes. NuVox generated USD 561 million in revenue and USD 115 million in operating income before depreciation and amortisation, adjusted to remove the impact of merger, integration and other non-recurring items, in the twelve months ended 30 June. The company offers advanced IP-based voice and data services to approximately 90,000 business customers and has approximately 1,700 employees, including about 700 in Greenville. The boards of both companies have approved the transaction, which is expected to close in the first half of 2010, subject to certain conditions, including necessary approvals from federal and state regulators.
