It’s official, q is off the market. The merger with CenturyLink (NYSE:CTL, news, filings) is now complete, and where there were two mostly rural ILECs there is now one big one. Pro forma for 2010, the combined company had revenues of $18.6B, EBITDA of $8.1B, and adjusted free cash flow of $3.1B. The combined company expects to continue its current annual dividend of $2.90 per share. While of course the biggest part of the deal is the traditional ILEC business, I’m quite curious to see where they take the combined intercity fiber assets.
Qwest of course has long operated one of the top longhaul backbones down to the conduit level, but has for many years tried to figure out just how to leverage that into something while maximizing their cash flow – not an easy task. CenturyLink has also operated an extensive regional footprint, which will add to the depth of the combined networks in the midwest and neighboring areas where Qwest’s intercity footprint lacked on and off-ramps. Will the combination of the two assets plus a stronger balance sheet lead to a greater presence in the space in years to come?
For now though, it will be integration time for CenturyLink and Qwest, which will probably involve at least a few layoffs. That’s to be expected, but this type of merger tends to have less than some other types – or so it has seemed to me.
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