Consolidated Communications is acquiring Champaign-Urbana, Ill., area Champaign Telephone Company (CTC) and its sister company, Big Broadband Services, a private business communications provider, for $13 million, deepening its fiber and on-net fiber building reach.
By making this deal, Consolidated will add 275 fiber route miles and 310 lit buildings to its existing fiber network which extends to Champaign, Ill., a community that's only 50 miles north of its Mattoon, Ill., headquarters.
Since it started out as a small PBX provider in 1984, CTC has been able to build up a strong set of business customers by offering a mix of regional Internet, Voice, Metro Ethernet, and Hosted VoIP provider.
Today, CTC serves approximately 1,500 business customers over 310 lit fiber buildings. CTC recorded fiscal 2015 revenue of approximately $10 million, the majority of which is recurring service revenue.
After meeting necessary closing conditions, including regulatory approvals, Consolidated expects to close the acquisition in either the second or third quarter of 2016.
While this is the first acquisition Consolidated has made since buying Eventis in 2014, the CTC deal reflects Consolidated's acquisition strategy to seek out regional fiber providers to enhance its fiber reach, particularly into more buildings to enhance its business and wholesale wireless customer base.
Steve Childers, CFO of Consolidated, told investors in June 2015 that while it had no plans to make a large purchase it is constantly "looking at regional fiber assets, maybe a cable overlay or some operating company-type stuff."
Expanding its fiber network continues to be a key priority for Consolidated. While it won't report its first quarter earnings until May 5, the telco ended 2015 with 13,717 fiber route network miles, a 10.6 percent leap for the full year.
A growing portion of Consolidated's capital spending is on the commercial side of its business.
Bob Udell, CEO of Consolidated, told investors during its fourth quarter 2015 earnings call that it was putting about two-thirds of its capex toward "success-based initiatives."
Udell said added that "our growth on the commercial side continues to be a more significant part of our spend."
The bet on the commercial side of its business continues to pay off. During the fourth quarter, Consolidated reported that commercial and carrier revenue rose 3.8 percent Meanwhile, the telco's metro Ethernet circuits increased 21 percent and cloud hosted voice lines grew 17 percent over the full year. What's more, Consolidated also added 345 new tower sites, a record for the year.
For more:
- see the release
Related articles:
Consolidated's business, broadband services help it beat Q4 estimates, offset voice, video declines
Consolidated sees growing momentum in small cell backhaul
Consolidated says Ethernet over Copper will help it address rural business markets
Consolidated's Childers says 80 percent of revenue comes from business, broadband services
Consolidated's Childers: Our future M&A activity will focus on regional fiber providers, cable assets