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Alltel births Windstream, state's newest public company Tuesday, Apr 11, 2006 By Wesley Brown Arkansas News Bureau LITTLE ROCK - A new publicly traded company called Windstream Communications was introduced Monday as Alltel Corp. moved forward with its $9.1 billion spinoff of its wireline business. Windstream, created by the joining of Alltel's landline business with Texas-based Valor Communications Group, will make its home in west Little Rock at the former site of Alltel's 5,000-employee information services businesses. "This is a big day for us," Jeff Gardner, Windstream's new president and chief executive, said at a news conference after unveiling the new company's lime-colored name and logo near its future headquarters. Keith Paglusch, a former Sprint and SBC telecom veteran hired just two weeks ago as Windstream's chief operating officer, said Arkansas' newest corporate citizen would move quickly to seek its own identity. "In my few short days here, I had the opportunity to meet people from our new company and I'm pleased to tell you they are awesome, they are talented, they are enthused and very dedicated to making (Windstream) a success in the marketplace," Paglusch said. Alltel first announced Dec. 9 that it would spin off its landline business and merge it with Irving, Texas-based Valor. The new company expects to trade on the New York Stock Exchange under the ticker symbol "WIN" on the first day of trade, expected by midyear. After the split, Windstream expects to have about $3.4 billion in annual revenues and nearly 3.4 million local access lines, making it the largest rural phone carrier in the nation. The company's product line-up will include traditional phone service, high-speed Internet and satellite TV from EchoStar Communications, the owner of The Dish Network. Gardner said members of his new management team include a mix of former top Alltel executives and key outside hires. They began selecting a new company name at the beginning of the year, after hiring New York-based consulting firm Lippincott Mercer to develop the new name and logo, he said. Originally, Lippincott submitted more than 2,000 names for the new company to management after an employee contest was held to solicit potential corporate monikers. "All of them were considered, but the remarkable thing was that in the end, one name stood out as most appealing to consumers through our research studies and unanimous among our management team," Gardner said. The new name represents a bridge between Windstream's 60-year history with Alltel and its future as a youthful technology company, he said. Still, Windstream will have close ties to Alltel, including the company's new corporate headquarters that served as the former offices of Alltel Information Services. Alltel sold the division for $1.05 billion to Jacksonville, Fla.-based Fidelity Financial Corp. in 2003. David Avery, a former Alltel spokesman who now heads Windstream's public relations, said the company would lease office space at two other Alltel-owned buildings in Little Rock and at Alltel's corporate headquarters near downtown. Gardner said after the news conference that Windstream has hired nearly 90 percent of its senior management team. "Most of our new employees were a part of Alltel, but we've probably gone outside for 10 or 20 key jobs to date," he said. Alltel's former chief financial officer would not say how many employees Windstream would eventually hire, but previous estimates have ranged between 700 and 1,000 workers. "There are going to be more jobs here in Little Rock," Gardner said, adding that Windstream also will look for opportunities to grow immediately after becoming a stand-alone company. Wall Street analysts have mentioned rural phone providers Connecticut-based Citizens Communications and Monroe, La.-based CenturyTel Inc., which fought off a $9 billion hostile bid by Alltel in 2001, as potential future acquisition targets by larger phone companies. "I can't talk specifically about any opportunities, but I would say that our size ... and the cash flow we will have puts us in a unique position to grow our business through acquisitions as well as organically," Gardner said. Ric Crane, Windstream's senior vice president of marketing, said Windstream would contact current customers about the new company and let them know that services won't change. Crane said the company has already selected The Concept Farm of New York as its advertising agency to handle Windstream's branding and marketing campaign. The company also will adopt its own corporate culture apart from Alltel's identity, he said. Alltel Chairman Scott Ford watched proudly as several former top Alltel executives helped birth the new company. He stood at the back of the crowd, beyond the media spotlight. "This is their time," Ford said, attempting to deflect questions about Alltel's future as a pure-play wireless service provider with roughly 11 million customers and annual revenues of nearly $10 billion. Ford did say that despite losing several top executives, Alltel has already replaced most of them internally. He added that as a pure wireless company the financial community will be able to become more familiar with Alltel's business. "In the long-term, we will be a different kind of company," Ford said of the nation's fifth-largest wireless company. "But the short-term impact will be pretty insignificant." At the closing of business Monday, Alltel shares were trading at $66.03, up 34 cents. |
