Iowa Telecommunications Services has announced that it has reached an agreement to acquire Bishop Communications for $43.9m, subject to certain balance sheet adjustments. Bishop is a privately held holding company whose operations include the Lakedale Telephone Company, a rural telecommunications provider covering 378 square miles in central Minnesota.
Lakedale provides CLEC services through Lakedale Link and En-Tel Communications in the incumbent territories of Embarq, Frontier and Qwest.
Alan L. Wells, chairman and chief executive officer of Iowa Telecom, said: This acquisition is a perfect opportunity to profitably grow our rural telecommunications business. More importantly, it meets our criteria for our acquisitions to be accretive to cash flow on a per share basis. Bishop is much like Iowa Telecom in that it operates in attractive service territories with appealing demographics, and has a very solid reputation with its customers and within the communities it serves.
He further said: In addition to operating very high-quality FTTN networks, Bishop also benefits from low access rates and a favourable regulatory standing. This acquisition is consistent with our strategy of growing our business by pursuing accretive opportunities in adjacent states.
Following receipt of regulatory approvals, Bishop will operate as a subsidiary of Iowa Telecom. The sale is expected to close in the second half of 2008.
Stifel, Nicolaus & Company served as exclusive financial adviser to Bishop Communications in the transaction.
Bishop is headquartered in Annandale, Minnesota. Its subsidiaries provide regulated and non-regulated communications services to business and residential customers. The company reportedly utilises FTTN networks to provide these telecommunications products. These FTTN infrastructures enable both Lakedale and EN-TEL to deliver between 4Mbps and 10Mbps DSL service to every access line served, while providing capacity for further growth.
