Windstream to acquire Broadview Networks

500px-Windstream_Communications.svgWindstream announced that it has signed a definitive agreement to acquire Broadview Networks Holdings, Inc., in an all-cash transaction valued at $227.5 million. Broadview, headquartered in Rye Brook, N.Y., is a leading provider of cloud-based unified communications solutions to small and medium-sized businesses. The company offers a broad suite of cloud-based services under the OfficeSuite UC™ brand.

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“Broadview’s unique, proprietary unified communications solutions will advance our product portfolio, improving our competitiveness and ability to provide enhanced services to business customers. The transaction also will enable us to leverage Broadview’s experienced salesforce and cloud operations across our national footprint,” said Tony Thomas, president and chief executive officer of Windstream.

“Broadview has been successful transforming its legacy telecom business into a leading provider of unified communications services to businesses that are ready to make the shift to the cloud for their communications services,” said Mike Robinson, president and chief executive of Broadview. “Windstream’s nationwide footprint, extensive portfolio of service offerings, vast distribution and attractive customer base are a natural fit for our strategic direction. We look forward to combining forces with their team to continue expanding our UCaaS business by delivering best-in-class services to customers across the country.”

Windstream intends to finance the transaction with cash reserves and available revolving credit capacity.

Windstream expects to realize approximately $30 million in annual operating synergies within two years. The transaction will improve Windstream’s balance sheet by reducing leverage through realization of synergies and will be accretive to free cash flow in the first year.

The boards of both companies unanimously approved the transaction. Broadview shareholders holding a majority of the company’s shares also approved the transaction by written consent.

The transaction is expected to close in the third quarter of 2017, subject to customary closing conditions, including receipt of necessary federal and state regulatory approvals.

Stephens Inc. and Deutsche Bank Securities Inc. are acting as financial advisers and Troutman Sanders LLP is acting as legal adviser to Windstream in the transaction.

Houlihan Lokey, Inc. and Jefferies LLC are serving as financial advisers and Willkie Farr & Gallagher LLP is serving as legal adviser to Broadview in the transaction.