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Windstream Buys EarthLink for $673MWindstream Buys EarthLink for $673M

ISPs look to a more enterprise -- and possibly wireless future -- as Windstream buys dial-up pioneer EarthLink.

Dan Jones

November 7, 2016

2 Min Read
Windstream Buys EarthLink for $673M

The communications consolidation craze continued Monday as Windstream announced that it will buy fellow ISP EarthLink in a stock deal worth $673 million.

Under the terms of the buyout, EarthLink shareholders will receive 0.818 shares of Windstream common stock for each EarthLink share owned. EarthLink says that the combined company should be able to save $125 million in "annual operating and capital expense synergies" within three years of closing the deal. The deal is expected to close in the first half of 2017.

Windstream Communications Inc. (Nasdaq: WIN) and EarthLink Inc. (Nasdaq: ELNK) are both wired Internet Service Providers (ISPs) offering consumer and enterprise voice and data services. In fact, EarthLink is such an old-school ISP that it still offers "dial-up Internet" for as low as $9.95 a month! Nonetheless, the combined company will have a fiber footprint covering around 145,000 route miles in the US.

Moreover, the deal could help Windstream pivot more towards the future. The company says that EarthLink's recently launched software defined-WAN will help to bolster its own enterprise business. SD-WAN uses software-defined networking (SDN) technology to connect enterprise networks, such as campuses or branch offices, over wide areas. (See EarthLink Jumps on SD-WAN Trend.)

Windstream, meanwhile -- like Google (Nasdaq: GOOG) and others -- is planning to deploy fixed wireless broadband in the US. The company said in October that it will move towards offering fixed wireless in up to 72 markets in the US. (See Fixed Wireless Revival: Windstream Eyes New Multi-Megabit Markets in US.)

For all the latest news on wireless, visit the mobile site here on Light Reading. After the transaction closes in 2017, Windstream CEO Tony Thomas and CFO Bob Gunderman will take those respective roles at the combined company. Windstream is trading down $0.01 at $7.23, while EarthLink is down $0.62 at $5.60 on the news. — Dan Jones, Mobile Editor, Light Reading

About the Author(s)

Dan Jones

Mobile Editor

Dan is to hats what Will.I.Am is to ridiculous eyewear. Fedora, trilby, tam-o-shanter -- all have graced the Jones pate during his career as the go-to purveyor of mobile essentials.

But hey, Dan is so much more than 4G maps and state-of-the-art headgear. Before joining the Light Reading team in 2002 he was an award-winning cult hit on Broadway (with four 'Toni' awards, two 'Emma' gongs and a 'Brian' to his name) with his one-man show, "Dan Sings the Show Tunes."

His perfectly crafted blogs, falling under the "Jonestown" banner, have been compared to the works of Chekhov. But only by Dan.

He lives in Brooklyn with cats.

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