Windstream will acquire Earthlink in an all-stock transaction valued at approximately $1.1 billion, including debt. Upon closing of the transaction, Windstream shareholders will own approximately 51 percent and EarthLink shareholders will own approximately 49 percent of the combined company.
The combined company will have increased scale and scope giving it the ability to leverage best practices across a broader platform, and offer customers expanded products, services and enhanced enterprise solutions. The combination
“The combination with EarthLink further advances Windstream’s strategy by creating a stronger, more competitive business to serve our customers while increasing free cash flow and reducing leverage,” said Tony Thomas, president and chief executive officer at Windstream. “With this transaction, we are combining two highly complementary organizations with closely aligned operating strategies and business unit structures. We look forward to working with the talented EarthLink team to create significant benefits and drive value for all of our stakeholders.”
The companies cited approximately $900 million from synergies, plus tax benefits, including more than $125 million in annual operating and capital expense synergies that are expected to be fully realized within 36 months of closing.
- Windstream is based in Little Rock, Arkansas. The company was founded in 2000 as Valor Telecom through through the takeover of Verizon’s GTE’ southwest assets. It adopted the Windstream name in 2006 with the acquisition of Alltell’s landline business.
- Earthlink was founded in 1994 and is based in Atlanta, Georgia.