Windstream, a leading provider of cloud computing, broadboad and voice services in the US and telecommunications company, EarthLink announced an agreement under which both companies will merge in an all-stock transaction valued at approximately $1.1 billion, including debt, combining the network service providers in an effort to trim costs amid declining revenue.
Upon closing of the transaction, Windstream shareholders will own approximately 51 percent and EarthLink shareholders will own approximately 49 percent of the combined company. Tony Thomas will serve as president and chief executive officer and Bob Gunderman will serve as chief financial officer of the combined company which will retain the Windstream name.
The deal is expected to generate over $125 million in cost synergies within three years, said teh companies. 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. Customers will also benefit from combining Windstream’s scale in the Enterprise segment and EarthLink’s successful launch of SD-WAN.
Tony Thomas, president and chief executive officer at Windstream
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.
EarthLink Chief Executive Officer and President Joe Eazor
In our work with Tony and his team, it’s become clear that we are two companies on parallel paths. We’ve both made significant progress as evidenced by our improving financial results and strengthening balance sheets. Now is the right time for us to come together.
