By Jamie Epstein, TMCnet Web Editor

Last Monday it was revealed to the world that Windstream (News - Alert), a preferred carrier of master agent TBI, would be purchasing PAETEC (News - Alert) Holding Corporation for an impressive $2.3 billion, which will in effect create a $6 billion competitive service provider that is heavily focused upon the business segment the channel targets, a recent article revealed.

According to an article written by Khali Henderson, the company will now have a chance to bring in around $6.1 billion in total revenue, around 63 percent of which will be compiled directly from businesses. In its own right, Windstream earns around $4 billion in annual revenue, with nearly half (49 percent) coming from businesses, while PAETEC receives an annual revenue of $1.6 billion in 2010, primarily gained from businesses.

Both companies separately sponsor indirect sales programs, with PAETEC’s program having been created when the company was started back in 1998, and Windstream’s program having been acquired through the merger with NuVox in 2009.

“PAETEC has always been a strong advocate for the channel," said PAETEC chairman and CEO Arunas Chesonis (News - Alert) in a statement. “John Leach, who runs sales for Windstream… has always been a strong advocate for the channel. I see us being very complementary there, and together we will be even stronger for the channel."

“If nothing else, [my experience at PAETEC] gives me a step up on the integration because I understand and know a number of the players and I know and understand a number of their dealers and I’m really familiar with the structure of the company," said Leach in a separate statement in a recent interview with Channel Partners. “When you go into these deals typically you don’t have that insight and it makes it easier when you do."

Last year, according to Henderson, both Windstream and PAETEC dramatically increased their fiber holdings when Windstream bought Kentucky Data Link, or KDL, whose fiber networks reach across 22 states. Shortly thereafter, PAETEC purchased Cavalier’s Intellifiber subsidiary, which boasts over 37,000 fiber route miles.

Leach added that he believes there is a strong link between Windstream and PAETEC, stating, “I think the culture the two companies have is very similar … both are competitive, both are focused on growth. And they are very people-oriented companies."

It looks like master agents are in favor of his recent merger, as Alan Sandler, managing partner for master agent Sandler Partners, based in Manhattan Beach, California, said, “This new company will have a stronger footprint and underlying network efficiencies, but most importantly, should provide the channel a strong ally when competing for customer care. PAETEC, which has always been ‘channel-friendly,’ is a textbook case study in how a company can focus on customer care to become a significant industry player. …Windstream/NuVox (News - Alert) also is very channel-friendly, flexible and quick moving."

Ken Mercer, senior vice president of master agent Telecom Brokerage Inc. (TBI), relayed to Channel Partners that both companies have been standouts in the market due to their financial stability. In regards to questions that are coming directly from subagents about whether they will continue to receive a paycheck once the acquisition has closed, Henderson reported that Mercer jokingly said, “Of course you are going to get paid, it’s called ‘PAE-STREAM.’"

Mercer went on to share his feelings about the merger, saying its “unbelievable" footprint will fill in the gaps for PAETEC, which is the newly joined business brand of the two companies.

Jamie Epstein is a TMCnet Web Editor. Previously she interned at News 12 Long Island as a reporter's assistant. After working as an administrative assistant for a year, she joined TMC (News - Alert) as a Web editor for TMCnet. Jamie grew up on the North Shore of Long Island and holds a bachelor's degree in mass communication with a concentration in broadcasting from Five Towns College. To read more of her articles, please visit her columnist page.

Edited by Rich Steeves