CenturyTel to Acquire Rural Telco Madison River

Looking to serve additional markets with a more far-reaching high-speed fiber network, CenturyTel Inc. today announced plans to acquire Madison River Communications Corp. in a deal valued at roughly $830 million.

The deal brings CenturyTel 176,000 rural access lines (which amounts to an 8 percent increase in its base) with 99 percent broadband coverage and 30 percent high-speed Internet penetration. The deal is expected to close in the second quarter of 2007, pending regulatory approval.

With this deal, CenturyTel adds attractive markets with good demographics and growth prospects in Alabama, Georgia, Illinois and North Carolina. Madison River's network includes a 2,400 route mile fiber network that CenturyTel said is complementary to its own.

Madison said its service offerings include local and long-distance voice, high-speed broadband and dial-up Internet access.

On a pro forma basis, the company will have approximately 2.3 million access lines and 390,000 high-speed Internet subscribers. Once this acquisition is fully integrated, CenturyTel estimated it will achieve annual cost synergies of approximately $17 million.

CenturyTel intends to finance the acquisition with debt and cash generated from operations. The firm also expects to complete the remainder of its current $1 billion share repurchase program by the middle of next year.

“Through efficient investment in their network and a grass-roots approach to their customer base, they have achieved virtually ubiquitous broadband enablement and strong high-speed Internet penetration," said Glen F. Post, III, chairman and CEO of CenturyTel. "This transaction fits CenturyTel's acquisition strategy and permits us to continue our share repurchase initiative while maintaining operational, financial and strategic flexibility."

Madison River said it generated $189 million of revenue, $99 million of EBITDA and $35 million of leveraged free cash flow, before anticipated synergies, in the 12 months ended September 30.

CenturyTel Inc. www.centurytel.com  

Maidson River Communications Corp. www.madisonriver.net