Rumor mill: FiberLight, Sidera up for sale

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FiberLight and Sidera are the latest two competitive fiber-based service providers to be rumored to be on sale with the intention of attracting a good price from either a private equity firm or another service provider that wants to expand its fiber network footprint to meet wholesale and retail service demands.

Sidera, the product of Abry Partner's acquisition of what was once known as RCN Metro under the RCN Corp. banner, is looking to fetch about $800 million according to unnamed sources cited in a Wall Street Journal article this week.

What could make Sidera, which has a presence in Boston, New York and Chicago, attractive to other service providers that are building up their fiber network is the fact they reside in and serve a number of major financial stock exchanges in the New York area. A growing base of service providers, including Sidera and other competitive providers like Lightower Networks, have been responding to the financial trading industry's growing demand for low latency fiber services.

Fiberlight also has high price hopes. The privately owned service provider had around $50 million in annual EBITDA and would like to get up to $500 million for its assets. After various company iterations, FiberLight has been aggressively expanding its fiber footprint to meet retail enterprise and wholesale opportunities such as wireless backhaul in recent years in Atlanta, Houston, Miami and Virginia.

The people close to these companies said that both have already hired investment banks to hold an auction that could attract both private equity companies in addition to other competitive fiber-rich providers such as AboveNet (NYSE: ABVT), Lightower and Paetec (Nasdaq: PAET). These three companies have also been aggressively expanding their own respective fiber footprints in the past year through a mix of acquisitions and organic growth programs.

Unlike the late 1990s when these companies were founded to chase Internet traffic demands that were still nonexistent, these networks are now becoming more attractive assets to fulfill actual growing demands being seen for bandwidth hungry IP-based business services, online video and wireless backhaul.

For more:
- Morningstar via The Wall Street Journal has this article

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