LITTLE ROCK, Ark.--(BUSINESS WIRE)--
Windstream Corporation (NYSE: WIN) announced today that it has completed
its acquisition of D&E Communications, based in Ephrata, Pa., in a
transaction valued at approximately $333 million.
D&E Communications shareholders received 0.650 shares of Windstream
stock and $5 in cash per each D&E share under terms of the agreement.
Windstream issued approximately 9.4 million shares of stock valued at
$95 million, based on the company's closing stock price on Nov. 9, 2009,
and paid approximately $74 million in cash as part of the transaction.
Windstream also assumed estimated net debt of approximately $164
million. Windstream financed the acquisition with existing cash and
current capacity on its revolving credit agreement.
Windstream adds highly complementary rural properties in Pennsylvania
under the transaction. D&E Communications has approximately 114,000 ILEC
access lines and about 46,000 high-speed Internet customers. High-speed
Internet service is available to 100 percent of D&E's ILEC lines, nearly
half of which can offer speeds up to 10 Mbps.
D&E operates as a competitive local exchange carrier (CLEC) in Altoona,
Harrisburg, Lancaster, Pottstown, Reading, State College and
Williamsport and serves approximately 47,000 lines.
D&E Communications generated $145 million in revenue and $64 million in
operating income before depreciation and amortization (OIBDA) in the
twelve months ended Sept. 30, 2009.
Windstream estimates the transaction will be accretive to free cash flow
in the first full year after expected annual synergies of approximately
$25 million in operating expenses and capital expenditure savings.
Non-GAAP Financial Measures
This press release references the non-GAAP financial measure OIBDA for
the twelve months ended Sept. 30, 2009. A reconciliation of OIBDA to the
most directly comparable GAAP measure is presented below:
Operating income under GAAP: $ 9 million
Depreciation and amortization: $ 29 million
Merger and integration costs $ 1 million
Goodwill and intangible asset impairment: + $ 25 million
OIBDA: $ 64 million
About Windstream
Windstream Corporation is an S&P 500 company that provides phone,
high-speed Internet and high-definition digital TV services to customers
in 16 states. The company also offers a wide range of IP-based voice and
data services and advanced phone systems and equipment to businesses and
government agencies. The company has approximately 2.9 million access
lines and about $3 billion in annual revenues. Windstream is ranked 4th
in the 2009 BusinessWeek 50 ranking of the best performing U.S.
companies. For more information about Windstream, visit www.windstream.com.
Windstream claims the protection of the safe-harbor for forward-looking
statements contained in the Private Securities Litigation Reform Act of
1995. Forward-looking statements are subject to uncertainties that could
cause actual future events and results to differ materially from those
expressed in the forward-looking statements. These forward-looking
statements are based on estimates, projections, beliefs and assumptions
that Windstream believes are reasonable but are not guarantees of future
events and results. Actual future events and results of Windstream may
differ materially from those expressed in these forward-looking
statements as a result of a number of important factors. Factors that
could cause actual results to differ materially from those contemplated
above include, among others: further adverse changes in economic
conditions in the markets served by Windstream; the extent, timing and
overall effects of competition in the communications business; continued
access line loss; the impact of new, emerging or competing technologies;
the adoption of intercarrier compensation and/or universal service
reforms by the Federal Communications Commission or Congress that
results in a significant loss of revenue to Windstream; the risks
associated with the integration of acquired businesses or the ability to
realize anticipated synergies, cost savings and growth opportunities;
the availability and cost of financing in the corporate debt markets;
the potential for adverse changes in the ratings given to Windstream's
debt securities by nationally accredited ratings organizations; the
effects of federal and state legislation, rules and regulations
governing the communications industry; material changes in the
communications industry generally that could adversely affect vendor
relationships with equipment and network suppliers and customer
relationships with wholesale customers; unexpected results of
litigation; unexpected rulings by state public service commissions in
proceedings regarding universal service funds, intercarrier compensation
or other matters that could reduce revenues or increase expenses; the
effects of work stoppages; the impact of equipment failure, natural
disasters or terrorist acts; earnings on pension plan investments
significantly below our expected long term rate of return for plan
assets; unexpected adverse results relating to the relocation of
Windstream's data center; and those additional factors under the caption
"Risk Factors" in Windstream's Form 10-K for the year ended Dec. 31,
2008, and in subsequent filings with the Securities and Exchange
Commission. In addition to these factors, actual future performance,
outcomes and results may differ materially because of more general
factors including, among others, general industry and market conditions
and growth rates, economic conditions, and governmental and public
policy changes. Windstream undertakes no obligation to update or revise
any forward-looking statements, whether as a result of new information,
future events or otherwise. The foregoing review of factors that could
cause Windstream's actual results to differ materially from those
contemplated in the forward-looking statements should be considered in
connection with information regarding risks and uncertainties that may
affect Windstream's future results included in Windstream's filings with
the Securities and Exchange Commission at www.sec.gov.