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Windstream to acquire Hosted Solutions

November 05
14:33 2010

Web Host ReviewsLittle Rock, AR — Windstream Corp. (Nasdaq: WIN) announced today that it has entered into a definitive agreement with ABRY Partners to acquire Hosted Solutions Acquisition, LLC (Hosted Solutions) in an all-cash transaction valued at $310 million.

Hosted Solutions, based in Raleigh, N.C., is a leading regional data center and managed hosting provider focused on enterprise-class Infrastructure as a Service (IaaS) solutions (managed hosting, managed services, colocation, cloud computing and bandwidth) for small and medium-sized business customers as well as large enterprises. The company serves more than 600 customers and has approximately 125 employees.

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The acquisition of Hosted Solutions will transform Windstream’s data center business, increasing the scale and scope by adding five state-of-the-art SAS 70 Type II certified data centers in Raleigh, N.C.; Charlotte, N.C., and Boston with a total of 68,000 square feet of data center capacity. As a result, Windstream will have a combined total of 12 data centers across the country.

“Data center space is increasingly in demand among our existing business customers,” said Jeff Gardner, president and chief executive officer of Windstream. “Hosted Solutions is an excellent complement to our existing enterprise service portfolio. For the past decade, they have been delivering highly complex managed hosting solutions to customers of various sizes. In addition, they have a proven track record of growing revenue and generating significant free cash flow.”

Windstream expects to finance the transaction with existing liquidity through cash reserves and revolving credit capacity.

Windstream will be able to fully amortize the purchase price goodwill over 15 years, resulting in expected tax benefits with an estimated net present value of $52 million.

Windstream estimates the transaction will be accretive to free cash flow in the first year following the closing after expected annual synergies of approximately $1.5 million in operating expense savings and excluding integration charges.

The boards of both companies have approved the transaction, which is expected to close in the fourth quarter of 2010, subject to certain conditions, including necessary regulatory approvals.

About Windstream
Windstream Corp. (Nasdaq:WIN), headquartered in Little Rock, Ark., is an S&P 500 company with communications operations in 23 states and about $4 billion in annual revenues. Windstream provides phone, high-speed Internet and high-definition digital TV services. The company also offers a wide range of IP-based voice and data services and advanced phone systems and equipment to businesses and government agencies. For more information about Windstream, visit www.windstream.com.

About Hosted Solutions
Hosted Solutions is the East Coast’s premier provider of enterprise-class managed hosting solutions. Its high quality data center and managed hosting services, including a dedicated server offering, managed colocation and its exclusive Stratus Trusted Cloud™suite , maintain and protect customers’ mission-critical IT systems and applications, enabling them to reduce operating costs, lower the risk of downtime, focus on core competencies, and achieve their top business objectives. The company operates five SAS 70 Type II certified data centers in Boston MA, Charlotte NC, Raleigh NC, and Cary NC, providing best-of-breed data center operations with hardened physical infrastructure, the highest level of security. It also offers a complete managed services portfolio, including enterprise storage, network, OS management, middleware server management, DBA services, security and disaster recovery. Hosted Solutions is backed by Boston-based private equity firm ABRY Partners. www.hostedsolutions.com.

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The 'Web Hosting Blog' at FindMyHost.com was established to provide the web hosting industry with the very latest in news, technology, interviews, event information and more. About FindMyHost.com: Launched in January 2001 to protect Web Host Consumers and Web Developers from making the wrong choice when choosing a Web host. FindMyHost.com showcases a selection of web hosting companies who have undergone our Approved Host program testing and provides reviews from customers.

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