LONDON (Thomson Financial) - Paetec Holding Corp has confirmed earlier
reports that it has signed a definitive agreement to acquire McLeodUSA
Incorporated, a privately-held business telecoms company, in an all-stock
merger, for 557 mln usd.
The merger price consists of 492 mln usd in Paetec common stock and 65 mln
usd of debt.
Paetec said the deal will make the company one of the largest nationwide
business communications service providers: Paetec is adding an extensive fibre
optic network and 18 states to its footprint, including markets like Dallas,
Houston, Denver, Detroit, Phoenix, Seattle and Cleveland.
The deal will create a company with an estimated 2.7 bln usd enterprise
value and is expected to produce cost synergies of approximately 20 mln usd in
the first year following the closing, and run-rate synergies of approximately 30
mln usd during the second year post-closing.
For the twelve months ended June 30, 2007, on a pro forma basis, the
combined company generated approximately 1.6 bln usd in revenue and 263 mln usd
in adjusted EBITDA, including 30 mln usd in synergies.
The combined company expects to have approximately 3.4 mln usd access line
equivalents in service and a local presence in 47 of the top 50 Metropolitan
Statistical Areas in the country in 2008.
The companies said they expect the transaction to close in the first quarter
of 2008.
tf.TFN-Europe_newsdesk@thomson.com
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