In Mid December, CenturyTel announced its intent to acquire Madison River Communication for $830 million. A month later it confirmed it would be acquiring its subsidiary Gallatin River as well.

Rob West, senior vice president of CoBank’s Communications Division at CoBank, said there was three times the merger and acquisition activity in this market than there have been in the last three years and that he expects to see more of it in 2007. He said there is a strong willingness to buy from companies looking to grow if the price is right. But for Madison River, he said the price was good for both parties.

“I think it was a pretty good buy,” West said. “It’s hard to compare apples to apples here, but if you look at the price Citizens paid for Commonwealth [Telephone Enterprises], I think it was pretty good price Madison River got for its properties.”

Citizens paid about $1.16 billion for CTE.

Monroe, La..-based CenturyTel will pick up 176,000 access lines throughout Alabama, Georgia, Illinois and North Carolina. Madison River has 99% broadband coverage in is territories and a 30% Internet service penetration rate. CenturyTel’s access lines would swell by 8% across its 25-state market. With this acquisition, CenturyTel will have approximately 2.3 million access lines and 390,000 high-speed Internet subscribers. CenturyTel also will assume the debt of Madison River. Madison River generated $189 million of revenue in 2006.

Glen Post, chairman and CEO of CenturyTel said, “Their lines are located in attractive markets and exhibit many of the demographic qualities we look for, including high household income and economic growth. [Its] markets are somewhat more urban that CenturyTel’s, but I think they are well positioned to defend their markets.”

Stifel Nicolaus analyst Christopher King said at the time of the announcement that CenturyTel estimates that the combined companies will generate annual synergies of $17 million, primarily as a result of corporate overhead and OSS cost reductions, but that King believes “that this guidance might be somewhat aggressive, as it equates to around 9% of trailing-twelve-months revenue for Madison River. Including the $17 million synergy figure, the deal values Madison River at approximately 7.2 times trailing twelve-months EBITDA.