Illinois-based Consolidated Communications is buying SureWest Communications for $341 million, or $23 per share.

The companies call it a  strategic combination that brings together operations in six states and nearly 1,800 employees. Consolidated says the acquisition gives it more diversification of revenue and cash-flow streams across multiple customer segments and geographies, a solid recipe for growth. The company expects to be an ever greater force as a triple-play provider.

This transaction combines our cash flow generating business with SureWests growth oriented strategy resulting in a financially strong company with a robust balance sheet and attractive dividend payout ratio,” said Bob Currey, Consolidateds president and CEO.  SureWest has built one of the highest quality networks in the industry and transformed itself into a leading broadband provider. The combined company will create a broader platform from which to expand our products and services to meet the demands of our customers.” 

Both Consolidated and SureWest have a long history of delivering the highest quality products and services to its customers,” said Steve Oldham, president and CEO of SureWest.  From a customer perspective, the transaction creates scale by combining our proven capabilities in delivering leading edge digital TV and broadband services as a stronger, more competitive communications company. We believe the transaction is in the best interests of our company, our customers, our communities and our shareholders.”

Roseville, Calif.-based SureWest serves more than 130,000 residential subscribers and 15,700 commercial businesses in the greater Kansas City and Sacramento regions. Consolidated provides a wide range of advanced services including voice, data and video services to residential and business customers in Illinois, Pennsylvania and Texas.    

Revenues of the combined companies as of Sept. 30, 2011, were $620 million. Consolidated expects to incur merger and integration costs, excluding closing costs, of approximately $20 million to $25 million over the first two years following closing. In addition, Consolidated will absorb SureWests net operating losses of approximately $67 million (as of Sept. 30, 2011).

The merger is subject to standard closing conditions including federal and state regulatory approvals and the approval by both Consolidated and SureWest shareholders.

Both companies sell through channel partners.