Ringing Up a Deal: Madison River To Be Sold for $830 Million
Posted December 18, 2006 11:46 a.m. EST
Updated December 18, 2006 12:25 p.m. EST
CenturyTel, which is based in Monroe, La., said Monday morning it would acquire Madison River in a deal worth $830 million.
Madison River, which includes the local telecommunications provider known as MebTel, operates three other local rural exchange carriers and has an extensive fiber optic backbone.
The deal includes cash for Madison River shares and assumption of Madison River debt.
Madison River operates in North Carolina, Alabama, Illinois and Georgia. The company had tried to go public in 2004.
CenturyTel (NYSE: CTL) offers services in 22 states.
The deal will add 176,000 Madison River access lines to CenturyTel’s customer base. Of those additions, 99 percent have access to broadband and 30 percent of customers already use high-speed Internet services, according to CenturyTel.
If the deal closes as expected in the second quarter of 2007, CenturyTel will have approximately 2.3 million access lines and 390,000 high-speed Internet subscribers.
Madison River maintains a 2,400-mile fiber backbone that CenturyTel said compliments its network.
The combined company should produce $17 million in reduced costs on an annual basis, according to CenturyTel.
Madison River is run by Stephen Vanderwoude, who founded the company in 1996, as chairman and chief executive officer. Paul Sunu, another company founder, is chief financial officer.
"Under Stephen Vanderwoude’s and Paul Sunu’s leadership, Madison River has built a great communications company,” said Glen Post III, chairman and CEO of CenturyTel. ”Through efficient investment in their network and a grass-roots approach to their customer base, they have achieved virtually ubiquitous broadband enablement and strong high-speed Internet penetration.”
Madison River reported revenues of $189 million for the 12 months ending Sept. 30.
Goldman Sachs & Co. and Merrill Lynch & Co. provided financial advice to Madison River.