Windstream 2010 Annual Report Download - page 105

common stock. The Company also repaid $266.2 million in outstanding indebtedness and related liabilities on existing
swap agreements of Q-Comm. The transaction includes Q-Comm’s wholly-owned subsidiaries Kentucky Data Link,
Inc. (“KDL”), a fiber services provider in 23 states and the District of Columbia, and Norlight, Inc. (“Norlight”), a
CLEC serving approximately 5,500 business customers.
On December 1, 2010, Windstream completed the acquisition of Hosted Solutions in an all-cash transaction valued at
$312.8 million, which included a $2.8 million net working capital adjustment, net of cash acquired. Windstream
financed the transaction through cash reserves and revolving credit capacity. Hosted Solutions, based in Raleigh, NC,
is a leading regional data center and managed hosting provider focused on enterprise-class Infrastructure as a Service
(IaaS) solutions (managed hosting, managed services, colocation, cloud computing and bandwidth) for small and
medium-sized business customers as well as large enterprises. This acquisition provided Windstream with five
state-of-the-art data centers in Raleigh, NC, Charlotte, NC, and Boston, MA, which serve more than 600 customers,
and provides opportunities for approximately $1.5 million in operating synergies. As of December 31, 2010,
Windstream operated a total of 12 data centers across the country.
On June 1, 2010, we completed our acquisition of Iowa Telecom, based in Newton, Iowa. This acquisition provides
Windstream with a sizable operating presence in the upper Midwest. As of June 1, 2010, Iowa Telecom provided
service to approximately 208,000 incumbent local exchange carrier (“ILEC”) access lines, 39,000 CLEC access lines,
96,000 high-speed Internet customers and 25,000 digital television customers in Iowa and Minnesota. The Company
expects to achieve $35.0 million in annual expense and capital synergies as a result of this acquisition. Pursuant to the
merger agreement, each share of Iowa Telecom common stock was converted into the right to receive 0.804 shares of
Windstream common stock and $7.90 in cash. We paid approximately $253.6 million in cash, net of cash acquired, and
issued approximately 26.7 million shares of our common stock valued at $280.8 million on the date of issuance. In
addition, we repaid outstanding indebtedness, including related interest rate swap liabilities, of Iowa Telecom of
approximately $628.9 million.
On February 8, 2010, we completed our acquisition of NuVox, a CLEC based in Greenville, South Carolina. Consistent
with the Company’s focus on growing revenues from business customers, the completion of the NuVox acquisition
added approximately 104,000 business customer locations in 16 contiguous Southwestern and Midwest states and
provides opportunities for approximately $30.0 million in operating synergies with contiguous Windstream markets.
NuVox’s services include voice over internet protocol, local and long-distance voice, high-speed Internet access, email,
voicemail, web hosting, secure electronic data storage and backup, internet security and virtual private networks. Many
of these services are delivered over a secure, privately-managed IP network, using a multiprotocol label switch
backbone and distributed IP voice switching architecture. In accordance with the NuVox merger agreement,
Windstream acquired all of the issued and outstanding shares of common stock of NuVox for $198.4 million in cash,
net of cash acquired, and issued approximately 18.7 million shares of Windstream common stock valued at $185.0
million on the date of issuance. Windstream also repaid outstanding indebtedness and related liabilities on existing
swap agreements of NuVox approximating $281.0 million.
On December 1, 2009, we completed our acquisition of Lexcom, which as of the date of acquisition served
approximately 22,000 access lines, 9,000 high-speed Internet customers and 12,000 cable television customers in North
Carolina. This acquisition increased Windstream’s presence in North Carolina and provides the opportunity for
approximately $5.0 million in operating synergies with contiguous Windstream markets. In accordance with the
Lexcom merger agreement, Windstream acquired all of the issued and outstanding shares of Lexcom for approximately
$138.7 million in cash, net of cash acquired.
On November 10, 2009, we completed our merger with D&E, which as of the date of acquisition served approximately
110,000 ILEC access lines, 35,000 CLEC access lines, 45,000 high-speed Internet customers and 9,000 cable television
customers. This acquisition increased Windstream’s presence in Pennsylvania and provides the opportunity for
approximately $25.0 million in operating synergies with contiguous Windstream markets. Pursuant to the merger
agreement, Windstream acquired all of the issued and outstanding shares of common stock of D&E, and D&E merged
with and into a wholly-owned subsidiary of Windstream. In accordance with the D&E Merger Agreement, D&E
shareholders received 0.650 shares of Windstream common stock and $5.00 in cash per each share of D&E Common
Stock. Windstream issued approximately 9.4 million shares of its common stock valued at approximately $94.6
million, based on Windstream’s closing stock price of $10.06 on November 9, 2009, and paid $56.6 million, net of
cash acquired, as part of the transaction. Subsequently, Windstream repaid outstanding debt of D&E totaling $182.4
million.
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