Windstream acquires tiny telco

Windstream Communications (NYSE:WIN) continues to nibble away at the RLEC market. Today the company bought Lexcom, a tiny triple-play provider in Lexington, North Carolina, whose 23,000-access-line network is contiguous with Windstream’s own.

Windstream is paying $141 million in cash. According to Stifel Nicolaus, the price is 3.2 times Lexcom’s 2008 revenue, nearly six times its EBITDA before synergies and nearly five times its EBITDA after synergies.

Windstream is in need of some larger M&A than this. The carrier has missed out on some major deals in the past year — instead acquiring relatively small D&E Communications and shedding its distribution arm — and is now dwarfed by CenturyLink and Frontier Communications (taking into account their recent deals).

Windstream may have courted Frontier and Embarq (now CenturyLink) before their respective deals. But now analysts say any major RLEC M&A will likely be on hold until the assets from the most recent major deals have been integrated.

Leave a Comment

Acceptable Use Policy

authimage
Enter the word as it is shown in the box above.
If you can't see the word, refresh the page.

Calendar

September 2009
M T W T F S S
« Aug   Oct »
 123456
78910111213
14151617181920
21222324252627
282930  

Your Account

Subscribe

Subscribe to RSS Feed

Subscribe to MyYahoo News Feed

Subscribe to Bloglines

Google Syndication