In an effort to broaden its cloud computing offerings in the business services and broadband markets, Windstream (News - Alert) Corp. has announced its plans to acquire Hosted Solutions LLC for $310 million.

The Associated Press reported that this deal is subject to regulatory approval, yet both companies expect that it will be able to close the transaction in the fourth quarter. Hosted Solutions is a Raleigh, N.C.-based company specializing in Web hosting services for small and medium-sized businesses. The company employs 125 people and supports more than 600 customers. Windstream, a landline phone company, expects to finance the acquisition with cash reserves and revolving credit. The tax benefit from the deal is expected to be about $52 million.

With 3.3 million access lines in mainly rural areas across 23 states, Windstream has nearly 1.27 million Internet customers. Operating mostly in the nation’s eastern half, the company has been devoting a greater emphasis to broadband and business services.

With this acquisition, Windstream will gain access to additional data centers and will use Hosted Solution’s management team to expand its business enterprise and cloud computing segment.

"Data center space is increasingly in demand among our existing business customers," Windstream president and CEO Jeff Gardner said in the AP piece. "Hosted Solutions is an excellent complement to our existing enterprise service portfolio. For the past decade, they have been delivering highly complex managed hosting solutions to customers of various sizes. In addition, they have a proven track record of growing revenue and generating significant free cash flow."

In August, Windstream announced that it entered into a definitive agreement to acquire Q-Comm Corporation (Q-Comm), a privately held regional fiber transport and competitive local exchange carrier based in Overland Park, Kan., in a transaction valued at approximately $782 million.

The transaction included Q-Comm's wholly owned subsidiaries Kentucky Data Link, Inc., (KDL), a fiber services provider in 22 states, and Norlight, Inc. (Norlight), a competitive local exchange services company primarily serving the Midwest. Both KDL and Norlight are based in Evansville, Ind.

Last month, TMCnet reported that Avaya, Inc. had selected Windstream Corp. to be a member in the Avaya DevConnect (News - Alert) program. Windstream announced that it will be joining other top technology companies in the Avaya DevConnect Program.

In May, the company expanded its converged communications services to Northwest Arkansas. Officials with Windstream said that the company's Integrated Solutions (News - Alert) combine voice, data and Internet services over the same connection for maximum value and flexibility.