Windstream said that it has entered into a definitive agreement to acquire Lexington-based Lexcom, for approximately $141m in cash. Under the transaction, Windstream will add around 23,000 access lines, 9,000 high-speed Internet customers and 12,000 cable TV customers.
Windstream expects the transaction will increase free cash flow in the first year following the closing of the transaction after expected annual synergies of approximately $5m in operating and capital expenditure savings.
Jeff Gardner, president and CEO of Windstream, said: “The transaction expands our North Carolina operations into neighbouring properties served by a quality voice, data and video network.”
Richard Reese, chairman and chief executive officer of Lexcom, said: “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.”
Lexcom generated approximately $44m in revenue, $16m in operating income and $24m in operating income before depreciation and amortisation (OIBDA) in 2008, Windstream said.
The company intends to finance the acquisition with existing cash and current capacity on its revolving credit agreement. 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.
