Windstream, which offers land-line telephone service in Lexington, announced an acquisition Monday that will bolster its revenue from business clients.
In a deal valued at $2.3 billion, Little Rock, Ark.-based Windstream will acquire New York-based PAETEC Holding Corp., a telecommunications company that serves businesses in 46 states. The company, with 5,000 employees, also operates seven data centers and owns an extensive fiber network that covers portions of 39 states.
"This transaction significantly advances our strategy to drive top-line revenue growth by expanding our focus on business and broadband services," Windstream chief executive Jeff Gardner said in a statement.
Under the agreement, PAETEC shareholders will receive 0.46 shares of Windstream stock for each PAETEC share they own. Windstream will assume about $1.4 billion in debt held by PAETEC.
The combined company would have had $6.1 billion in total revenue for the year ending March 31, the companies said. That would place it among the Fortune 500. The bulk of the revenue is attributable to Windstream, with roughly $4 billion in annual revenue.
Businesses and broadband sales would have accounted for 70 percent of the combined revenue, the companies said.
The acquisition continues a series of purchases by Windstream to bolster its business-oriented revenues, as it seeks ways to offset a weakening land-line business. In late 2010, the company completed the purchases of Hosted Solutions, Kentucky Data Link and Norlight, all tailored to help the company expand its business and increase broadband revenue.