Windstream Corporation to Acquire CT Communications for $585 Million
May 29 2007 - 8:00AM
Business Wire
Windstream Corporation (NYSE: WIN) announced today that it has
entered into a definitive agreement to acquire all of the
outstanding shares of CT Communications, Inc. (NASDAQ: CTCI) for
$31.50 per share in cash, which represents a 31 percent premium to
CT Communications� previous 30-day trading average. Including the
assumption of cash and debt, the transaction is valued at
approximately $585 million. The acquisition is expected to close in
the second half of 2007, subject to certain conditions, including
necessary approvals from federal and state regulators and CT
Communications shareholders. Windstream intends to finance the
acquisition with debt and existing cash while maintaining its
strong balance sheet. Strategic Rationale With this acquisition,
Windstream adds attractive markets in North Carolina, which are
adjacent to existing operations. CT Communications has broadband
availability to 95 percent of its ILEC lines, 75 percent of which
can offer up to 10Mb speeds. Once this acquisition is fully
integrated, Windstream expects to realize free cash flow
improvements through expected annual cost synergies of
approximately $30 million as well as reductions in capital
expenditures. �CT Communications� management and employees have
built an exceptional business and are highly respected in their
local communities. CT Communications fits strategically with
Windstream and advances our strategy of continuing to grow through
acquisitions while expanding our free cash flow,� said Jeff
Gardner, President and CEO of Windstream. Financial Information CT
Communications generated $179.2 million of revenue, $57 million of
operating income before depreciation and amortization (OIBDA) and
$25.3 million of operating income in the twelve months ended March
31, 2007. Windstream estimates the transaction will be
approximately 4.0 percent accretive to leveraged free cash flow,
after synergies, in the first full year of operations. On a pro
forma basis, Windstream will have approximately 3.4 million access
lines and 744,000 broadband customers. Additional Information
Stephens Inc. and Kutak Rock, LLP acted as financial and legal
advisors to Windstream on the transaction. Raymond James &
Associates, Inc. and Moore & Van Allen, PLLC acted as financial
and legal advisors to CT Communications. Non-GAAP Financial
Measures This press release references the non-GAAP financial
measure OIBDA for the twelve months ended March 31, 2007. A
reconciliation of OIBDA to the most directly comparable GAAP
measure is presented below: Operating income under GAAP: $ 25.3
million Depreciation and amortization: +� $ 31.7 million OIBDA: $
57 million About Windstream Windstream Corporation (NYSE: WIN)
provides voice, broadband and entertainment services to customers
in 16 states. The company has approximately 3.2 million access
lines and about $3.2 billion in annual revenues. For more
information, visit www.windstream.com. About CT Communications CT
Communications, Inc. (NASDAQ: CTCI), headquartered in Concord,
N.C., is a growing provider of integrated telecommunications and
related services to residential and business customers located
primarily in North Carolina. CTC offers a comprehensive package of
telecommunications services, including broadband high-speed
Internet services, local and long-distance telephone services, and
digital wireless voice and data services. More information can be
found at www.ctc.net. Windstream claims the protection of the
safe-harbor for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements are subject to uncertainties that could cause actual
future events and results to differ materially from those expressed
in the forward-looking statements. These forward-looking statements
are based on estimates, projections, beliefs, and assumptions that
Windstream believes are reasonable but are not guarantees of future
events and results. Actual future events and results of Windstream
may differ materially from those expressed in these forward-looking
statements as a result of a number of important factors. Factors
that could cause actual results to differ materially from those
contemplated above include, among others: adverse changes in
economic conditions in the markets served by Windstream; the
extent, timing and overall effects of competition in the
communications business; failure to realize expected benefits as a
result of the transactions described above, including the ability
to integrate CT Communications� business into existing operations
and realize the synergies expected from this transaction; material
changes in the communications industry generally that could
adversely affect vendor relationships with equipment and network
suppliers and customer relationships with wholesale customers;
changes in communications technology; the risks associated with the
separation of the publishing business; the potential for adverse
changes in the ratings given to Windstream's debt securities by
nationally accredited ratings organizations; the availability and
cost of financing in the corporate debt markets; the effects of
work stoppages; the effects of litigation, including any litigation
with respect to the above-referenced transactions; and the effects
of federal and state legislation, rules and regulations governing
the communications industry. In addition to these factors, actual
future performance, outcomes and results may differ materially
because of more general factors including, among others, general
industry and market conditions and growth rates, economic
conditions, and governmental and public policy changes. Windstream
undertakes no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. The foregoing review of factors that could cause
Windstream's actual results to differ materially from those
contemplated in the forward-looking statements should be considered
in connection with information regarding risks and uncertainties
that may affect Windstream's future results included in
Windstream's filings with the Securities and Exchange Commission
(SEC) at www.sec.gov. Additional Information and Where to Find It
This press release may be deemed to be solicitation material in
respect of the proposed merger of CT Communications and
Windstream.�In connection with the proposed merger, CT
Communications plans to file a proxy statement with the SEC.
INVESTORS AND SECURITY HOLDERS OF CT COMMUNICATIONS ARE ADVISED TO
READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED
WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THOSE DOCUMENTS
WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER.�The
final proxy statement will be mailed to shareholders of CT
Communications. Investors and security holders may obtain a free
copy of the proxy statement, when it becomes available, and other
documents filed by CT Communications with the SEC, at the SEC�s web
site at www.sec.gov.�Free copies of the proxy statement, when it
becomes available, and CT Communications� other filings with the
SEC may also be obtained from CT Communications by directing a
request to CT Communications, Inc., 1000 Progress Place, NE, Post
Office Box 227, Concord, North Carolina 28026-0227, Attention:
David H. Armistead, Corporate Secretary. CT Communications,
Windstream and their respective officers and directors may be
deemed to be soliciting proxies from CT Communications�
shareholders in favor of the proposed merger.�Information regarding
CT Communications� directors and executive officers is available in
CT Communications� proxy statement for its 2007 annual meeting of
shareholders, which was filed with the SEC on March 22,
2007.�Additional information regarding the interests of such
potential participants will be included in the proxy statement and
the other relevant documents filed with the SEC when they become
available.
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