Independent telco Windstream (Nasdaq: WIN) said it has completed its acquisition of CLEC PAETEC Holding Corp., an announcement that was expected following the approval of the deal by the Federal Communications Commission late last month.
The $2.3 billion deal was announced last summer, and is the latest evidence of successful consolidation among independent local teclos and CLECs, a sort of match that enhances the ability of companies like Windstream to compete in the enterprise market.
Windstream said in statement announcing the closing that PAETEC shareholders received 0.460 shares of Windstream stock for each PAETEC share they owned at closing. The deal involved a total of about $863 million in Windstream stock, with the buyer taking on about $1.4 billion in net debt from PAETEC.
Other financial details from the statement: "The transaction is expected to be accretive to free cash flow per share, excluding merger and integration costs, in the first year. Windstream expects to generate annual pre-tax operating cost synergies of approximately $100 million and capital expenditure savings of approximately $10 million, which are expected to be fully realized in three years. Windstream also expects to incur merger and integration costs of approximately $50 million in operating expense in the first year and approximately $55 million in capital expenditures over the first three years. The transaction also includes tax assets with an estimated net present value of approximately $250 million."
-here's the Windstream release
The FCC approved the Windstream-PAETEC deal just days ago
PAETEC shareholders approved the deal in October
The acquisition was announced last summer
Windstream settled a shareholder lawsuit in October