Windstream Holdings and EarthLink Holdings Corp have announced that their respective boards of directors have unanimously approved a definitive merger agreement under which Windstream and EarthLink will merge in an all-stock transaction valued at approximately USD1.1 billion, including debt. Under the terms of the agreement, EarthLink shareholders will receive 0.818 shares of Windstream common stock for each EarthLink share owned. As such, Windstream expects to issue around 93 million shares of stock valued at roughly USD673 million, based on the company’s closing stock price on 4 November 2016. Upon closing of the transaction, Windstream shareholders will own approximately 51% and EarthLink shareholders will own around 49% of the combined company.
The combined company will have an extensive national footprint spanning approximately 145,000 fibre route miles, including strategic routes located in the Southeast and Northeast US. Of the 29,000 fibre route miles that EarthLink is bringing into the combined company, 16,000 are said to be ‘unique’. Further, the two companies have identified more than USD125 million in annual operating and capital expense synergies that are expected to be fully realised within 36 months of closing.
The combined company, which will retain the Windstream name, will be headquartered in Little Rock, Arkansas, and maintain offices in key US markets. The transaction is expected to close in the first half of 2017, subject to approval from the Federal Communications Commission (FCC).