Consolidated Communications beefs up holdings by buying SureWest

Consolidated Communications (Nasdaq: CNSL) is the latest independent ILEC to take a crack at the ever-consolidating telecom service provider market by acquiring SureWest Communications (Nasdaq: SURW).

In a cash and stock transaction, SureWest will acquire all of the outstanding shares of SureWest for about $340.9 million.

As part of the agreement, SureWest's shareholders have the option of exchanging each share of SureWest common stock for either $23.00 in cash or in shares of Consolidated's common stock having an equivalent value based on average trading prices for the 20-day period ending two days before the closing of the acquisition. 

Upon completion, the combined company will have operations that stretch across six states.

SureWest currently serves 130,000 residential subscribers and 15,700 commercial businesses in the greater Kansas City and Sacramento regions, while Consolidated provides various voice, data and video services to residential and business customers in Illinois, Pennsylvania and Texas.     

"This transaction combines our cash flow generating business with SureWest's growth oriented strategy resulting in a financially strong company with a robust balance sheet and attractive dividend payout ratio," said Bob Currey, Consolidated's President and Chief Executive Officer in a statement. "SureWest has built one of the highest quality networks in the industry and transformed itself into a leading broadband provider.  The combined company will create a broader platform from which to expand our products and services to meet the demands of our customers."

For the twelve months ending 30 September 2011 the combined company would have had revenues of about $620 million on a pro forma basis.

For more:
- see the release

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