Windstream to Acquire VoIP Provider PAETEC for $2.3 Billion

Matthew Weinberger

August 2, 2011

1 Min Read
Windstream to Acquire VoIP Provider PAETEC for $2.3 Billion

IT solution provider Windstream has reached an agreement to acquire VoIP specialist and MSP PAETEC for $2.3 billion, in a move designed to expand the company’s footprint in the growing cloud market.

Jeff Gardner, president and CEO of Windstream, issued a prepared statement that really says it all:

“This transaction significantly advances our strategy to drive top-line revenue growth by expanding our focus on business and broadband services. The combined company will have a nationwide network with a deep fiber footprint to offer enhanced capabilities in strategic growth areas, including IP-based services, data centers, cloud computing and managed services. Financially, we improve our growth profile and lower the payout ratio on our strong dividend, offering investors a unique combination of growth and yield.”

In plain English: It sounds like Windstream is looking to use PAETEC’s technology and know-how both to grow its business delivering managed and cloud services over its newly expanded broadband network. As a refresher, PAETEC updated its cloud portfolio as early as May 2011, adding managed cloud servers. Oh, and PAETEC was already planning on building at least 13 new data centers around the world. So this may go down as a good value for Windstream and its investors.

Details are scarce, but it sounds like when the deal officially closes later this year, PAETEC’s 5,000-strong staff will stay on, creating a Fortune 500 titan of a broadband and business service provider with an estimated $6 billion in total revenues. And presumably it will add PAETEC’s technologies to Windstream’s partner programs.

Keep watching TalkinCloud for more progress reports on Windstream going forward — especially as it expands its presence.

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