Iowa Telecommunications Services Inc., the parent company of Lakedale Telephone Co. of Annandale, has agreed to be acquired by Windstream Corp. of Little Rock, Ark. The $1.1 billion deal was announced last week and is expected to become final in July, but there was no indication whether it would affect Lakedale operations. Iowa Telecom acquired Lakedale, which provides local, long distance, cell phone, internet and digital TV service to area communities, in July 2008. Lakedale in April announced the elimination of 20 jobs because of overlapping duties and operational synergies between the Annandale office and other Iowa Telecom offices. John Scheel of Big Lake is director of Minnesota operations for Lakedale after the retirement of longtime general manager Gene South. Lakedale referred inquiries last week to Iowa Telecom corporate headquarters in Newton, Iowa. "It’s just business as usual" until the sale closes, Iowa Telecom spokesman Dan Eness said. He couldn’t say what the impact of the sale would be on future Lakedale operations. Windstream spokesman David Avery said it’s premature to speculate on the number of positions in the merged company that may be affected by the transaction. Typically the two companies conduct a joint transition process that looks at staffing needs and redundant functions "in order to put together an integrated plan that provides a seemless transition for customers," he said. What is known, he said, is that Iowa Telecom has well-run properties, which were "a driving force in the transaction." "Lakedale customers will continue to receive the same outstanding service that they always have as well as the additional benefit of doing business with a large company with significantly greater resources," Avery said. Eness said since Windstream is a much larger company with the ability to invest in the latest technology, customers should have access to more services. Iowa Telecom provides residential and business communication service to about 450 Iowa communities and 10 in Minnesota and employs about 800 people. Windstream, which provides voice, broadband and entertainment services to customers in 16 states, said it will maintain an operating presence in the headquarters building in Newton and plans to expand the existing Newton call center. Windstream president and CEO Jeff Gardner said the Iowa Telecom properties are well run and profitable and "offer a unique opportunity to expand our operations into Iowa and Minnesota." "This has been a difficult decision," Iowa Telecom chairman and CEO Alan L. Wells said, "but we firmly believe that the combination with Windstream is in the best interest of our company, our customers and our shareholders. "As the telecommunications industry changes, it has become clear that we need to increase the size and scale of our operations in order to continue to offer our customers the services they need. "Windstream is a leader in our industry and has a reputation for deploying advanced services," Wells said. The transaction is expected to close in mid-2010, Iowa Telecom said, subject to certain conditions and approvals from federal and state regulators and its shareholders. The acquisition is Windstream’s fourth in the past six months, according to a Wall Street Journal story. The company’s growth underscores the need to expand in the face of heightened competition from cable and a deteriorating fixed-line business, the Journal said. Telecommunications companies, facing more customers switching to cable phone lines or dropping land lines for cell phones, have been quick to make deals, the newspaper said. A larger telecommunications company can pass its capital expenditures and operating expenses across a wider base of customers and territories.
