US telecommunications and data center services company Paetec reported substantial year-over-year revenue growth for the third quarter of 2011.

The company is going through the process of being acquired by Windstream, a large US provider of telecommunications services. Paetec reported a net loss of $17.1m on US$536.3m in sales for the third quarter.

The latter figure represented a 31% year-over-year increase in quarterly revenue. Arunas Chesonis, the company's CEO, attributed strong performance to higher sales, lower churn and operating efficiencies, which “enables us to exceed $100m in adjusted EBITDA for the first time in the company's history.” Toward the end of October, Paetec shareholders approved its planned merger with Windstream.

The companies expect to complete the merger by the end of 2011. Windstream and Paetec announced the $2.3bn acquisition agreement in August. They said then that combined company was expected to generate more than $6bn in annual revenue and about $2.4bn in operating income. Paetec shareholders will receive 0.46 shares of Windstream stock for each Paetec share they own.

As a result, they will own about 13% of the combined company. While its product and services portfolio consists of a wide range of data center and network services, the bulk of Paetec's revenue comes from core network services. These services brought $343m in revenue in the third quarter. Revenue from core network services is followed by integrated solutions, which brought $65m during the quarter.

Finally, core carrier services contributed $59.5m to third-quarter revenue. Fairport, New York-based Paetec operates seven data centers and owns about 36,700 fiber route miles. Paetec's data center services include colocation, managed storage, dedicated and virtual server, Cloud-based services and more.