Windstream To Buy Iowa Telecom For $1.1 Billion

CHUCK BARTELS

LITTLE ROCK, Ark. (AP) — Phone company Windstream Corp. announced Tuesday it would buy Iowa Telecommunications Services Inc. for $1.1 billion in cash and stock, and pick up a quarter-million subscribers in Iowa and Minnesota.

Little Rock-based Windstream will take on nearly $600 million in Iowa Telecom debt.

The transaction will also give Windstream 95,000 high-speed Internet customers and 26,000 video subscribers. The deal is expected to close in mid-2010.

The announcement drove Iowa Telcom shares sharply higher in Tuesday trading.

Windstream said it expects "annual synergies" of $35 million, saving money on capital expenditures and operating expenses. Windstream spokesman David Avery said the savings will come in a number of areas, "including corporate administration and network expense."

The company is also to look at possible job cuts.

"It's premature to speculate on the number of positions that may be affected through the transaction," Avery said. "We will conduct a joint transition process with Iowa Telecom to evaluate overall staffing needs and identify redundant functions."

Windstream was formed in 2006 when it was spun off from Little Rock-based Alltel Corp. and merged with Valor Communications Group of Irving, Texas, in a $4.9 billion deal. Alltel has since been gobbled up by Verizon Wireless.