Telecommunications service provider Windstream said Tuesday it agreed to buy broadband Internet service provider CT Communications for about $585 million including debt, in a bid to expand its business in North Carolina.

CT shares jumped $9.80, or 45 percent, to $31.38 after the announcement of the deal, which values CT at $31.50 per share and represents a premium of 31 percent over its previous 30-day trading average, according to Windstream.

With this deal, expected to close in the second half of 2007, Windstream said it expects to realize free cash flow improvements through annual cost savings of about $30 million as well as cuts in capital expenditures.

CT Communications posted $179.2 million in revenue and $57 million in operating income before depreciation and amortization (OIBDA) in the year that ended March 31, Windstream said.

Windstream shares were up 12 cents at $15.04 in morning trading on the New York Stock Exchange.