Iowa Telecommunications Services, one of the leading telecommunication service provider, has entered into an agreement to acquire substantially all of the assets of Sherburne Tele Systems, Inc. for $80.6 million, subject to certain balance sheet and tax adjustments.

Sherburne, headquartered in Big Lake, Minnesota is a closely held telecommunications company, whose subsidiaries provide regulated and non-regulated communications services to business and residential customers. For the year ended December 31, 2007, Sherburne generated revenues of $29.4 million and EBITDA, as adjusted, of approximately $11.3 million.

This is the second acquisition of Iowa Telecommunications in Minnesota this year. Earlier in July, the company had acquired Bishop Communications, in this region.

Official sources quoted that, the $80.6 million acquisition deal includes $2.7 million price for Sherburne's recently purchased 700 MHz spectrum, which company had acquired through its affiliate Wireless Communications Ventures.

To fund the purchase, Iowa Telecommunications has engaged the Rural Telephone Finance Cooperative as the arranger for $75.0 million in Incremental Loans under terms outlined in the existing Credit Agreement.

The deal is expected to close in the first half of 2009.