Windstream to Purchase Iowa Telecommunications Services

In a release, the Company noted that Iowa Telecom shareholders will receive 0.804 shares of Windstream stock and $7.90 in cash per each Iowa Telecom share under terms of the agreement approved by the boards of directors of both companies. Windstream expects to issue approximately 26.5 million shares of stock valued at approximately $269 million, based on the company's closing stock price on Nov. 23, and pay approximately $261 million in cash as part of the transaction. Windstream also will repay estimated net debt of approximately $598 million. Windstream intends to finance the cash portion of the transaction and the repayment of Iowa Telecom's outstanding indebtedness with the proceeds from a debt financing or additional bank borrowings.

"These are well-run, profitable properties in very rural service areas that expand our presence in the Upper Midwest and grow our free cash flow per share," said Jeff Gardner, president and CEO of Windstream. "I also am pleased to have Alan join our company's board of directors. His financial acumen and executive management experience will be a tremendous asset."

"This is an excellent transaction for our shareholders, and for the customers that we serve," said Alan L. Wells, Iowa Telecom Chairman and CEO. "Windstream is a leader in our industry, and Jeff Gardner and his team have done an outstanding job of profitably growing their business in challenging times. Windstream shares our commitment to both customer service and shareholder value, and we're very pleased that our company will be joining the Windstream organization."

Windstream said that it estimates the transaction will be accretive to free cash flow in the first year following the closing after expected annual synergies of approximately $35 million in operating expenses and capital expenditure savings and excluding integration charges. The transaction also includes tax assets with an estimated net present value of approximately $130 million.

The transaction is expected to close in mid-2010, subject to certain conditions, including necessary approvals from federal and state regulators and Iowa Telecom shareholders.

Iowa Telecom provides communications services to residential and business customers in Iowa and Minnesota. The company has approximately 256,000 access lines, about 95,000 high-speed Internet customers and about 26,000 digital TV customers.

"Windstream has extensive experience with successfully integrating new properties. The transactions we have announced this year are scheduled to close in an orderly fashion over a period of time providing the opportunity for very manageable integrations," Gardner said. "Each of these companies is extremely well run, and we are very far along in our integration planning."

Windstream Corp. provides phone, high-speed Internet and high-definition digital TV services to customers in 16 states.

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