Three days after reporting a 29 percent slide in first-quarter profit, Windstream Corp. (WIN) said it’s buying Pennsylvania-based D&E Communications (DECC).
Windstream’s stock was trading down about 22 cents, at $8.83, a little after noon Eastern.
Windstream is among the stronger of the rural incumbents and the company has been the subject of M&A speculation for some time. On Monday, the Arkansas-headquartered local phone provider said it will buy D&E for $159 million in stock and cash, and assume about $171 million of D&E’s net debt. D&E shareholders will receive .65 shares of Windstream stock and $5 cash for each share held. The deal totals approximately $330 million.
Jeff Gardner, president and CEO of Windstream, said in a prepared statement that acquiring D&E will give double the size of Windstream’s business in Pennsylvania. D&E’s network is broadband-capable, he said, and the transaction provides the opportunity “to grow cash flow, reduce our dividend payout ratio and create value for shareholders and customers.”
Windstream expects to add 165,000 access lines and 44,000 high-speed users when it completes the D&E purchase.