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LONDON, UK / ACCESSWIRE / April 17, 2017 / Active Wall St. blog coverage looks at the headline from Windstream Holdings, Inc. (NASDAQ: WIN) as the Company announced on April 13, 2017, that it has signed a definitive agreement to acquire Broadview Network Holdings, Inc., in an all-cash transaction valued at $227.5 million. Windstream intends to finance the transaction with cash reserves and available revolving credit capacity. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.

One of Windstream Holdings' competitors within the Telecom Services - Domestic space, AT&T Inc. (NYSE: T), is expected to report its fiscal Quarter ending March 2017 earnings results on April 25, 2017 after market close. AWS will be initiating a research report on AT&T following the release of its next earnings results.

Today, AWS is promoting its blog coverage on WIN; touching on T. Get all of our free blog coverage and more by clicking on the link below: http://www.activewallst.com/register/.

Expanding UCaaS Portfolio

The Little Rock, Ark-based telecom provider expects the acquisition to generate $30 million annually in operating synergies within two years. The acquisition of Broadview is highly complementary to Windstream's portfolio, where it expects to dominate the UCaaS segment, expected to grow to $43 billion markets by 2020.

Broadview acquisition offers Windstream UCaaS leadership and proprietary product offering with the best-in-class portal. The segment offers low capital intensity with an attractive financial profile. UCaaS offers numerous third party integrations and is highly scalable and flexible with a high degree of customization opportunities.

The Company

Broadview Networks is the leading provider of cloud-based unified communication solutions (UCaaS) to small and medium-sized businesses and enterprise customers nationwide. Founded in 1996, the Company currently has 20,000 business customers and 7,300 cloud users. With more than 182,000 active end-users, Broadview has a growth-oriented portfolio where it churns out $1000 monthly revenue per customer.

Broadview has a unique cloud-based award-winning platform under its portfolio offering features like OfficeSuite UC and HD Meeting. The network access facilities provided by the Company are robustly scalable where it offers Data, Voice, Professional, and Security Services.

Synergies

The acquisition is set to generate network synergies of $10 million annually, achieved through optimization of access costs, leveraging greater scale and realizing more on-net opportunities. On the other hand, SG&A optimization synergies are expected to be $20 million annually by reducing combined public Company costs and leveraging the best practices available across Companies to maximize efficiency.

Windstream expects to generate net synergies of $30 million, annually where the first $20 million is expected by the end of FY17 and the full $30 million by the end of FY18. The transaction creates multiple growth opportunities for the Company where it will utilize Broadview's proprietary cloud-based UCaaS product across its SMB and mid-market Enterprise Business units.

The Earthlink Merger

On November 07, 2016, Windstream announced an unanimously approved definitive merger agreement, pursuant to which, Windstream and Earthlink merged in an all-stock transaction valued at about $1.1 billion, including debt. Under terms of the agreement, Earthlink's shareholders received 0.818 shares for Windstream's common stock for each Earthlink share owned.

The combined Company is set to get increased scale and scope, offering it the ability to leverage best practices across a broader platform, offering customers expanded products, services, and enhanced enterprise solutions. The merger resulted in an extensive national footprint spanning approximately 145,000 fiber foot miles while delivering advanced network connectivity, managed services, voice, the internet, and other value-added services.

Windstream Growth Portfolio

Windstream executed two major agreements in the last 6 months, in an attempt to achieve minimum leverage and greater cash flow, through inorganic expansion. The Broadview acquisition is a step to establish itself as the leader in the UCaaS segment, while the Earthlink merger was an attempt to dominate the SD-WAN (Software-Defined Wide Area Network) segment.

With the SD-WAN segment market size anticipated to grow from $0.6 billion in FY16 to $6 billion in FY20, the acquisition is set to offer Windstream multiple synergies and greater cash flows over the years of operation. Additionally, Windstream can leverage Broadview's cloud-based platform to synchronize its SMB its mid-market Enterprise customer base to achieve margin expansion.

Stock Performance

At the close of trading session on Thursday, April 13, 2017, Windstream Holdings' stock price ended the day flat at $5.55. A total volume of 2.38 million shares were exchanged during the session. The stock currently has a market cap of $1.01 billion has a dividend yield of 10.81%.

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SOURCE: Active Wall Street