Private equity firm to acquire Maine's Oxford Networks for $50M
Oxford Networks, an independent telco that's been struggling financially, is selling itself to Montreal-based private equity firm Novacap for $50 million. According to a proxy statement that was obtained by the Bangor Daily News, Novacap's deal includes equity and debt financing.
Similar to other larger independent telcos such as CenturyLink (NYSE: CTL) and Windstream (Nasdaq: WIN), Oxford has made some bold moves to realign its focus from being a POTS-only provider to a diversified service provider that provides a broader host of consumer and business service such as video and cloud.
Among those moves were to build a fiber backbone stretching from Bangor to Boston and entering the data center business by building a facility at the former Brunswick Naval Air Station. It also purchased Norton Lamb & Company to run the data center business.
However, the company struggled through this transition in recent years. After posting a $2.8 million loss in 2012, it was forced to lay off 10 percent of its staff, reducing its total employee base to 120 workers.
Oxford Networks' CEO Craig Gunderson said in an interview with the Bangor Daily News that he could not provide further details about its deal with Novacap because the company is in a "quiet period." He added that being acquired by Novacap would give it a broader set of resources to expand its service portfolio.
In the proxy statement, Oxford's board approved the Novacap deal because its need for additional funds "had reached a critical point."
Since two of Oxford Networks' subsidiaries, Oxford Telephone Co. and Oxford West Telephone Co., are still regulated utilities, they will need the approval of both the Maine Public Utilities Commission and the FCC.
Oxford is one of many service providers that have been acquired by private equity firms in recent years. Other large-scale deals include Berkshire Partners' move to acquire both Lightower Fiber Networks and Sidera Networks for $2 billion in January 2013.
- Bangor Daily News has this article
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