Iowa Telecom Acquires Another Minnesota Telco

I’d use an analogy about detasseling here, but it would probably be lost on a lot of folks who haven’t spent time in the rural Midwest, so instead I’ll try this... They know how to grow ‘em in Iowa. As proof of that, Iowa Telecommunications Services Inc. (IWA) today revealed plans to acquire the assets of Sherburne Tele Systems Inc. for $80.6 million.

The $80.6 million purchase price includes $2.7 million for Sherburne's recently purchased 700 MHz spectrum, acquired through its affiliate Wireless Communications Ventures.

The deal marks Iowa Telecom’s second acquisition in Minnesota this year.

Sherburne Tele Systems is a closely held telecommunications company serving nine communities adjacent to the Minneapolis/St. Paul Metropolitan Area. Its operations include both ILEC services, marketed as Connections Etc., and a CLEC business ─ wholly-owned subsidiary, Northstar Access. As of Sept. 30, Sherburne served 15,700 ILEC access lines, 10,000 CLEC lines, 13,600 DSL high-speed Internet customers and 3,600 video customers.

For the year ended Dec. 31, 2007, Sherburne generated revenue of $29.4 million and EBITDA, as adjusted, of approximately $11.3 million.

"This acquisition is another opportunity to profitably grow our rural telecommunications business," said Alan L. Wells, Iowa Telecom Chairman and CEO. "Sherburne operates in attractive service territories with appealing demographics, and has a very solid reputation with its customers and within the communities it serves.”

Sherburne's headquarters is in Big Lake, located less than 30 miles from the headquarters of Bishop Communications, which Iowa Telecom acquired in July.

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