Windstream Corp. (WIN) is making its fourth acquisition of 2009 with the $1.1 billion stock-and-cash purchase of Iowa Telecommunications Services Inc. (IWA) And this time, not only does Windstream snag more rural markets, it also is bulking up its wireless spectrum holdings.

Iowa Telecom’s stock shot up almost 25 percent in mid-morning trading, while Windstream’s shares faltered about 1 percent on the news.

Windstream will give Iowa Telecom shareholders about 26.5 million shares of stock valued at around $269 million, and pony up another $269 million in cash. Then, Windstream also will repay net debt of approximately $598 million. Windstream said it will save up to $35 million in operating and capital expenses thanks to the Iowa Telecom buy.

“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,” Jeff Gardner, president and CEO of Windstream, said in a prepared statement.

Iowa Telecom serves residential and business users in Iowa and Minnesota. The company has approximately 256,000 access lines, about 95,000 high-speed Internet subscribers and about 26,000 digital TV customers. Iowa Telecom operates approximately 11 access lines per square mile across its service areas, and claims a fiber and IP network.

In addition to those assets, Windstream also will own Iowa Telecom’s 15 FCC Advanced Wireless Service licenses and three 700MHz band licenses.

Earlier this month, Windstream forked out $643 million for CLEC NuVox Inc. to expand its small business reach. The rural incumbent this year also has bought Lexcom and D&E Communications. Once all of the purchases are complete, Windstream expects to report about $4 billion in annual revenue.

To that point, Windstream aims to wrap the Iowa Telecom deal by mid-2010. Both companies’ boards have approved the acquisition. Alan Wells, chairman and CEO of Iowa Telecom, will join Windstream’s board of directors.

Windstream didn’t say whether it will keep Iowa telecom’s 800 workers, although it did say it will maintain operations in Iowa Telecom’s Newton headquarters and will expand the call center there.

In the meantime, Windstream may leap at more acquisition opportunities. Gardner told the Wall Street Journal this has been “an unusually aggressive year” for Windstream’s M&A strategy and that the company now sits in a good place. However, he wouldn’t rule out further deals, the Journal reported.