Birch Communications gets $12 million from CoBank
Birch Communications on Monday secured $12 million in funding from CoBank, giving it more cash to seek out new "accretive acquisitions" of other service providers that complement its growth strategy.
"Birch's IP-Network expansion and numerous acquisitions have enhanced communications service throughout their service footprint, including many of the communities our bank is chartered to serve," said Kevin Oliver, CoBank vice president, in a release about the funding.
CoBank, which will become a syndicated lender in the CLEC's senior secured credit facility, has been taking an active role in the competitive telecom segment. In addition to Birch, CoBank made a long-term, $105 million investment in competitive fiber provider FiberLight in December 2012.
Birch has been aggressively expanding its network through both a mix of organic efforts and targeted acquisitions. In January, the CLEC acquired Covista Communications, the 17th deal it has made in the past seven years.
Simultaneously, Birch has been seeking out various investment partners.
In addition to CoBank, the CLEC secured over $117.5 million in financing from CIT Vendor Finance and Bank of America and other partners PNC Bank and National Association to purchase new equipment and fund potential acquisitions. Separately, it also secured $17 million in financing from Wells Fargo Bank last October.
One of the interesting aspects of Birch is that the company has remained profitable and independent at a time when the competitive provider industry is rapidly consolidating.
While Birch does not formally report its quarterly earnings, it said in the quarter that ended on June 30, 2012 that organic sales increased by 18 percent compared to the same period in 2011. As a foundation for further growth, the service provider previously spent $50 million to build out an IP network in the Southeast and Southwest.
- see the release
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