The small cascade of official announcements that poured out of RCN Metro's headquarters beginning about two weeks ago--just a few months after RCN's acquisition by investment equity ABRY Partners--it was separating from RCN Cable, the management team was being reorganized--came as a surprise to some outside the investment community, although the broadband half of RCN had been quietly discussing the spinoff for a few months and it wasn't exactly a secret to their investors.
Now completely separate from RCN and delisted from the Nasdaq, the company last Thursday announced it is rebranding as Sidera, a sort of final flourish to the whole process and a clear signal that the company wants to operate on its own terms with no ties to their fraternal twin.
With the acquisition now behind them, Sidera's newly appointed CEO Michael T. Sicoli and its Vice President of Marketing & Business Development, Maura Mahoney, sat down with FierceTelecom's managing editor Samantha Bookman at the COMPTEL PLUS Fall show to talk about the reasoning behind their separation from RCN and what they'll be focusing on in the months ahead.
FierceTelecom: So--why Sidera? What spurred the acquisition and spinoff of RCN Metro and the subsequent name change?
Sicoli: Maybe we can start with a little bit of background on the separation of the companies and get into the specifics of why Sidera versus the other 4 million choices that was considered.
In terms of the vision of separating the companies, as a public company in RCN's prior form, we had a cable company and a fiber company and on many levels that made sense, but we really from a market standpoint struggled to get credit, to get the right credit for each one, let alone combined. So whether you call it a conglomerate discount or something else, it just sort of wasn't getting the value that we felt like it was worth. ABRY was able to come in and make a bid for the company that gave shareholders the upside they needed to say yes, but also enabled ABRY to have the ability to see a path to them making money down the road. They felt like separating the two companies would enable each company to achieve its full potential on its own and not have to compete with its brother for resources and attention.
I definitely think the capital intensive nature of the cable business hindered the growth of RCN Metro for a couple years. We had only in 2010 gotten to the point where we were able to allocate the capital we really thought made sense to Metro because the cable company had just gone through a digital migration that just took 30, 40, 50 million bucks over a two year period and there wasn't enough room to fund the growth of Metro, raising additional money in a public forum for these, for getting growth, didn't work or didn't make sense. But in a private company context it makes a whole lot more sense.
This is a pure play growth company now, we're 100 percent aligned with the exponential growth of broadband, and we have an equity partner now and a capital structure that enables us to invest whatever it takes to deliver the growth that we can capture. So we're unfettered at this point, which really helps the company, but I think it really helps customers because we can give it our full attention, we're able to bid on a lot more opportunities now, and really bid on bigger opportunities for some of our larger customers because we have the ability now to go get extra capital for a project that makes sense on a project by project basis. Public companies don't operate that way. So it's very exciting for us that we're able to go and capture that opportunity now in a way that our peers hadn't been able to do.
Mahoney: So in looking at a new name, we wanted to take this as an opportunity to relaunch the company and go forward with who we are. So we wanted the name to be memorable, so we avoided words like fiber and light, we did not want to see ourselves as another Tier 2 service provider, we wanted a name that represented who we are today ... and sidera is Latin for a constellation of stars. So you think about a network with points of presence and someone that represents a constellation. When we looked at our employees and customers, we believe they are stars, the best of the best, so we (picked) the name Sidera, and the more we tried it out-- we went through 4,000 iterations of names, combinations of names, it's the one that was always on the list and it continued to rise.
In the rebranding effort we included our employees on the name, and an employee came up with the name, and an employee designed the logo. So it's very much our company, our brand, as we take it to the marketplace. And Mike's done a fantastic job coming on board as the CEO of really raising the bar. So we're an extremely customer focused company, we want to be excellent, we have this margin of flawless execution, and I think (he's) raising it to say, we're very good, but how do we take it to great?