[ACCESSWIRE]
LONDON, UK / ACCESSWIRE / November 8, 2016 / Active Wall St. blog coverage looks at the headline from Windstream Holdings, Inc. (NASDAQ: WIN) and EarthLink Holdings Corp. (NASDAQ: ELNK) as both companies announced on November 07, 2016, that they have agreed to be merged in an all-stock transaction. The deal is valued at approximately $1.1 billion inclusive of debt. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.
Today, AWS is promoting its blog coverage on WIN and ELNK. Get all of our free blog coverage and more by clicking on the link below:
http://www.activewallst.com/registration-3/?symbol=WIN
http://www.activewallst.com/registration-3/?symbol=ELNK
Commenting on the merger Tony Thomas, President and CEO of Windstream said:
"The combination with EarthLink further advances Windstream's strategy by creating a stronger, more competitive business to serve our customers while increasing free cash flow and reducing leverage."
Joe Eazor, CEO and President of EarthLink said on his part:
"In our work with Tony and his team, it's become clear that we are two companies on parallel paths. We've both made significant progress as evidenced by our improving financial results and strengthening balance sheets. Now is the right time for us to come together."
Details of the Merger
As per the terms of the transaction, shareholders of EarthLink will receive 0.818 share of Windstream for each share owned by them. Windstream will issue 93 million new shares which are valued at approximately $673 million to finance the deal. Once the deal is finalized, Windstream will own 51% of the merged company and EarthLink would own the remaining 49%. Windstream plans to refinance EarthLink's debt valued at approximately $436 million as on September 30, 2016.
The transaction is expected to close in the first half of 2017 and is subject to fulfilment of statutory requirements including the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
The merged company will continue to use the Windstream name and will be headquartered in Little Rock, Arkansas, with offices at key locations across the US. Current President and CEO of Windstream, Tony Thomas, will continue as the President and CEO, and Bob Gunderman will serve as Chief Financial Officer of the merged company. Key members of the EarthLink's top management team would be brought in the merged company for smooth integration. The new company's Board of Directors will consist of 12 members including three EarthLink Directors who will be joining the Board of the merged company.
Advantages of the merger
Windstream is broadband, voice, and cloud computing services company operating out of Rochester and employs around 12, 700 people, whereas, EarthLink is an Atlanta-based IT services provider offering cloud networking as well as other network services. With the merger, the companies would be able to expand its product portfolio and reach across customers. The merged company will have a national footprint of approximately 145,000 fiber route miles and including strategic routes located in the Southeast and Northeast U.S. The merged company will be able to offer enhanced network connectivity, managed services, voice, internet and other value-added services. The merger will help Windstream assets to add value to EarthLink's business thereby leading to cost savings and better sales opportunities.
The merged entity expects to save $125 million in annual operating and capital expense synergies within three year of the closure of the merger of which approximately $50 million will be realized within one year of the finalization of the deal. Windstream is absorbing losses of EarthLink valued at $95 million which will help in saving taxes.
The transaction will be accretive to Windstream's adjusted free cash flow, which will help in making strategic investments to strengthen networks and reducing debts. Windstream is confident of maintaining the annual dividend of $0.60 per share even after the merger.
Consolidation in the telecommunication space seems inevitable due to increased competition and fight for efficiencies. Recently, CenturyLink had announced the acquisition of Level 3 on October 31, 2016.
Stock Performance
Windstream Holdings' stock marginally fell 0.14%, closing Monday's session at $7.23 on volume of 3.56 million shares, which was higher than the 3 months average volume of 1.56 million shares. The company's shares gained 18.44% since the beginning of the year. Additionally, the stock has surged 22.63% in the last twelve months. The company's shares have a dividend yield of 8.30%. The company has a market capital of 714.47 million.
At the close of yesterday's trading session, EarthLink Holdings' stock price declined 9.97% to end the day at $5.60. A total volume of 3.43 million shares were exchanged during the session, which was above the 3-month average volume of 539.38 thousand shares. The stock currently has a market cap of $587.50 million and has a dividend yield of 3.57%.
Active Wall Street:
Active Wall Street (AWS) produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and micro-cap stocks. AWS has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.
AWS has not been compensated; directly or indirectly; for producing or publishing this document.
PRESS RELEASE PROCEDURES:
The non-sponsored content contained herein has been prepared by a writer (the "Author") and is fact checked and reviewed by a third party research service company (the "Reviewer") represented by a credentialed financial analyst, for further information on analyst credentials, please email [email protected]. Rohit Tuli, a CFA® charterholder (the "Sponsor"), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on publicly available information which is believed to be reliable. Content is researched, written and reviewed on a reasonable-effort basis. The Reviewer has not performed any independent investigations or forensic audits to validate the information herein. The Reviewer has only independently reviewed the information provided by the Author according to the procedures outlined by AWS. AWS is not entitled to veto or interfere in the application of such procedures by the third-party research service company to the articles, documents or reports, as the case may be. Unless otherwise noted, any content outside of this document has no association with the Author or the Reviewer in any way.
NO WARRANTY
AWS, the Author, and the Reviewer are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. AWS, the Author, and the Reviewer expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, AWS, the Author, and the Reviewer do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.
NOT AN OFFERING
This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither AWS nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever. To download our report(s), read our disclosures, or for more information, visit http://www.activewallst.com/disclaimer/.
CONTACT
For any questions, inquiries, or comments reach out to us directly. If you're a company we are covering and wish to no longer feature on our coverage list contact us via email and/or phone between 09:30 EDT to 16:00 EDT from Monday to Friday at:
Email: [email protected]
Phone number: 1-858-257-3144
Office Address: 3rd floor, 207 Regent Street, London, W1B 3HH, United Kingdom
CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.
SOURCE: Active Wall Street
