Telecommunications provider Windstream is acquiring in a deal worth $310 million.

Windstream (Nasdaq: WIN) is based in Little Rock, Ark. and provides telecommunications and Internet services across much of North Carolina.

"After looking at the market, I felt that Windstream was the best fit for us, based on the fact that they share our core values and operating principles," said Hosted Chief Executive Officer Rich Lee in an e-mail.

Lee will not stay with Windstream when the deal closes, a Hosted spokesperson said.

"They’re committed to delivering great service and building long-lasting relationships with customers," Lee added. "I’m confident that Windstream will help take Hosted Solutions to the next level and that this transaction will benefit all of our customers."

Hosted operates data centers in Raleigh, Cary, Charlotte and suburban Boston, Mass.

Hosted’s team will manage Windstream’s data center operations and remain based in Raleigh.

Kip Turco, chief operating officer at Hosted, will run the combined data business unit for Windstream.

Hosted is owned by private equity firm ABRY Partners.

ABRY from co-founder and CEO Lee for $140 million.

In May, ABRY sold a data center operation based in Texas for $525 million.

The deal is all cash, Windstream announced before the markets opened Thursday.

Windstream already operates seven data centers.

Hosted, which maintains five centers and is based in Raleigh, has 125 employees. The merging of the data operations will have "very, very minimal" impact on Hosted’s headcount, according to Hosted Vice President of Marketing Noreen Allen.

"Data center space is increasingly in demand among our existing business customers," said Jeff Gardner, president and chief executive officer of Windstream, in a statement. "Hosted Solutions is an excellent complement to our existing enterprise service portfolio. For the past decade, they have been delivering highly complex managed hosting solutions to customers of various sizes. In addition, they have a proven track record of growing revenue and generating significant free cash flow.”

The deal is expected to close in the fourth quarter.

According to the announcement, Hosted generated $51.7 million in revenue in the 12 months ending Sept. 30 of this year. Its revenue has grown 48 percent over the past three years.

Kirkland & Ellis LLIP acted as legal advisors to ABRY and Hosted.
Windstream operates in 23 states and generates some $4 billion in revenues. The company has made several acquisitions in North Carolina over the past three years, including CTC Communications in Concord.

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