Windstream & EarthLink To Merge In All-stock Deal - Quick Facts

(RTTNews) - Windstream Holdings, Inc. (WIN) and EarthLink Holdings Corp. (ELNK) announced their boards approved a definitive merger agreement under which Windstream and EarthLink will merge 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. EarthLink shareholders will receive 0.818 shares of Windstream common stock for each EarthLink share owned. Windstream expects to issue approximately 93 million shares of stock valued at approximately $673 million. Windstream intends to refinance EarthLink's gross debt of approximately $436 million.

The companies said the combination will result in an extensive national footprint spanning approximately 145,000 fiber route miles and provide advanced network connectivity, managed services, voice, internet and other value-added services. Tony Thomas will serve as president and CEO and Bob Gunderman will serve as CFO of the combined company. The transaction will be significantly accretive to Windstream's adjusted free cash flow. The board expects to maintain Windstream's annual dividend of $0.60 per share after the transaction closes.

The companies have identified more than $125 million in annual operating and capital expense synergies that are expected to be fully realized within 36 months of closing. The companies noted that $125 million of synergies has a net present value of $900 million, representing value creation of more than $4.70 per Windstream share and $3.85 per EarthLink share after accounting for integration costs. The transaction is expected to close in the first half of 2017.