GREENVILLE,NewSouth Communications has signed a merger-of-equals deal with St. Louis-based NuVox, but will retain the lead role and headquarters of the new company.

Financial terms of the proposed merger between the two privatelyheld companies were not disclosed.

Combined, the new company will operate under the name NuVox Communications and will continue to support a strong regional focus in St. Louis. It will provide local, long distance, data, and Internet services to approximately 36,000 business customers across the Southeast and the Midwest, operate 500,000 access lines, and have annualized revenues exceeding $300 million.

“The combination of NewSouth and NuVox will very quickly allow for more robust products and services for the current customers of both existing companies, and further allow us to market to a wider base of business customers across our markets,” stated Jim Akerhielm, president and CEO of NewSouth. “Better products, better business solutions for our customers, and a larger potential customer base position the new NuVox to take full advantage of the growth potential in our markets.”

The senior management team will be comprised of individuals from both Greenville, SC-based NewSouth and NuVox, with Akerhielm serving as CEO. David Solomon, the chairman and CEO of the existing NuVox, will become chairman of the new company’s board.

“Combining these two already successful competitive local exchange carriers with complementary customer markets, overlapping geographic targets, and profitable operations makes very good strategic sense and is definitely a win-win proposition,” Solomon said in a statement. “Together, the new company can build on the strengths and experience of each company and thereby position us as the leading provider of communications services to business customers in the Southeast and Midwest.”

James Greene, a partner at Kohlberg Kravis Roberts & Co. (KKR), has served on the board of NewSouth since KKR’s initial investment in 2000 and will continue to serve as a board member for the new company.

“Both NewSouth and NuVox have made significant investments in technology and the buildout of their networks,” commented Greene. “Combining the two networks allows for a number of operational and financial efficiencies enabling us to truly leverage this investment in technology, and ultimately to accelerate profitability in the new company.”

Michael Hannon, a partner at JP Morgan Partners, the private equity affiliate of JP Morgan Chase, also will join the new company’s board. Hannon currently holds a seat on the existing board of directors at NuVox.

“Consolidation in the telecommunications space is well underway, but unlike many mergers, the NuVox/NewSouth combination makes for not just a bigger company, but a much stronger company,” Hannon said. “The proven track record of this management team and very compelling financial results absolutely support the future growth of the new NuVox Communications. We are extremely excited to continue our involvement with the new company.”

The transaction is expected to close by May. Until closing, NewSouth and NuVox say they will continue to operate separately and their customers will not experience changes to existing service agreements. New or revised customer contracts will not be required as a result of the merger.

The merger has been approved by the board of directors at both NewSouth and NuVox, but completion of the transaction is subject to approval by the stockholders of both companies, as well as regulatory approvals and customary closing conditions.

NuVox: www.nuvox.com

NewSouth: www.newsouth.com