Windstream Communications, which has been hounded by speculation over the last year and a half regarding its potential role in rural telco consolidation, announced that it is buying D&E Communications, based in Ephrata, Pa., in a deal worth about $330 million. The telco, which is more than a century old, serves markets in central Pennsylvania that should nicely complement existing Windstream markets in that state.
D&E Communications has 118,000 ILEC access lines, 47,000 CLEC lines and about 44,000 broadband Internet customers. Windstream already has about 200,000 of its roughly 3 million access lines in Pennsylvania. The companies are looking to close the acquisition in the second half of this year.
Under the terms of the deal, as stated in a press release, "D&E Communications shareholders will receive 0.650 shares of Windstream stock and $5 in cash per each D&E share... Windstream expects to issue approximately 9.5 million shares of stock valued at $86 million, based on the company's closing stock price on May 8, 2009, and pay approximately $73 million in cash as part of the transaction. Windstream also will assume estimated net debt of approximately $171 million. Windstream intends to finance the acquisition with existing cash and current capacity on its revolving credit agreement."
- Here's the press release at BusinessWire
Windstream reported a first quarter profit decline last week
Windstream has long been perceived to be a potential consolidator
D&E last year pursued software-as-a-service