Warwick Valley Telephone Announces Acquisition of Alteva for $17M

Warwick Valley Telephone Company WWVY announced today that it has entered into a definitive asset purchase agreement to acquire substantially all of the assets of Alteva, LLC, a cloud-based Unified Communications solutions provider and North America's largest enterprise hosted Voice over Internet Protocol provider, for cash and stock with a combined value of approximately $17 million. The Board of Directors of the Company and the Board of Managers of Alteva, LLC have both approved the acquisition, which is subject to regulatory approvals and certain other customary conditions. The transaction is expected to close in the third quarter of 2011. Following the closing of the acquisition, WVT will integrate its existing Competitive Local Exchange Carrier business, USA Datanet, with the operations of Alteva. This combination will enable the Company to better capitalize on the growth that both service providers had been experiencing independently in the fast growing market for UC and hosted applications for business and enterprise customers. It is anticipated that the Alteva acquisition will increase WVT's consolidated revenues by approximately 30% on an annual basis, with an even greater percentage improvement in operating cash flow growth, before consideration of cost savings associated with expected integration synergies and the expected increase in business volume. "This is an extraordinary acquisition that will significantly contribute to our strength and momentum in the marketplace, favorably impact our highly skilled workforce and the services delivered to our customers, and, most importantly, support our mission to deliver value to our shareholders," said Duane W. Albro, President and CEO of Warwick Valley Telephone Company. "We believe we have found a strong partner in Alteva, a fast growing UC service provider which has a complementary business, a well regarded brand, and shared values that will both benefit from and contribute to WVT's future success."