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Paetec doubles size with acquisition
Paetec doubles size with acquisition
Paetec Holding Corp. Friday completed an acquisition of McLeodUSA Inc. The move effectively doubles Paetec’s size and establishes the Perinton-based Paetec in Midwestern markets previously beyond its reach.
Completion of Paetec’s merger with the Cedar Rapids, Iowa-based McLeodUSA adds 21 states to Paetec’s territories and gives Paetec coast-to-coast reach in the U.S. telecommunications market.
The combination of the two competitive local exchange carriers creates a telecom provider with some 4,000 workers and 3.5 million access line equivalents and would by the end of this year see Paetec competing in 82 of the top 100 U.S. metropolitan markets, Paetec said. The firm is projected to generate annual revenues of $1.6 billion.
Structured as a no-cash stock swap, the merger gives McLeodUSA shareholders 1.3 shares of Paetec stock for each McLleodUSA share held, and calls for Paetec to assume $65 million in McLeodUSA debt.
Paetec stock (Nasdaq: PAET) midday was trading down down 11 cents at $8.49, $3.87 a share less than its closing price on the day the deal was announced last September.
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