LITTLE ROCK, Ark.--(BUSINESS WIRE)--
Windstream Corporation (NYSE: WIN) today announced it has entered into a
definitive agreement to acquire Lexcom, Inc., based in Lexington, N.C.,
for approximately $141 million in cash.
"Lexcom has a proud history providing reliable communications and
entertainment services to residents and businesses in Davidson County,"
said Jeff Gardner, president and CEO. "The transaction expands our North
Carolina operations into neighboring properties served by a quality
voice, data and video network."
Richard Reese, Lexcom's chairman of the board and chief executive
officer, said, "Throughout the years Lexcom has always provided
state-of-the-art services to our customers. The telecommunications
industry continues to grow rapidly due to increased technological
capabilities and ever-changing habits of users. However, whereby size
and scope have become much more important in the industry, the Board of
Directors feels that Windstream, especially considering its size and its
presence within North Carolina, is positioned to continue providing
state-of-the-art services to Lexcom's customers."
Windstream will add approximately 23,000 access lines, 9,000 high-speed
Internet customers and 12,000 cable TV customers in the transaction.
The acquisition is expected to close in the fourth quarter of 2009,
subject to certain conditions, including necessary approvals from
federal and state regulators and Lexcom shareholders. The company
intends to finance the acquisition with existing cash and current
capacity on its revolving credit agreement.
Lexcom generated approximately $44 million in revenue, $16 million in
operating income and $24 million in operating income before depreciation
and amortization (OIBDA) in 2008.
Windstream expects the transaction will be accretive to free cash flow
in the first year following the closing of the transaction after
expected annual synergies of approximately $5 million in operating and
capital expenditure savings.
Additional Information
Stephens Inc. acted as financial adviser and Kutak Rock LLP acted as
legal adviser to Windstream on the transaction. Mazer Telecom Advisors
and Robinson, Bradshaw & Hinson, P.A. acted as financial and legal
advisers to Lexcom.
Non-GAAP Financial Measures
A reconciliation of OIBDA to the most directly comparable GAAP measure
for Lexcom for 2008 is presented below:
Operating income under GAAP: $ 16 million
Depreciation and amortization: + $ 8 million
OIBDA: $ 24 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 3 million access
lines and about $3.1 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.
About Lexcom
Lexcom Communications is a provider of integrated telecommunications and
video services, as well as services in local and long-distance
telephone, Internet and data, and digital wireless, to business and
residential customers located primarily in Davidson County.
In 1998, the parent company name changed to Lexcom, Inc. and continued
the tradition of service and technological advancement as it became the
parent company to its subsidiaries: Lexcom Telephone, Lexcom Wireless
LLC, Lexcom Cable Services LLC and Lexcom Long Distance LLC.
Cautionary Statement Regarding Forward-Looking Statements
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, including statements regarding the
completion of the acquisition and expected benefits of the acquisition,
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: receipt
of required approvals of regulatory agencies and Lexcom's shareholders;
the possibility that the anticipated benefits from the acquisition
cannot be fully realized or may take longer to realize than expected;
the possibility that costs or difficulties related to the integration of
Lexcom's operations into Windstream will be greater than expected; the
ability of the combined company to retain and hire key personnel; and
those additional factors under the caption "Risk Factors" in
Windstream's Form 10-K for the year ended Dec. 31, 2008. 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.