AboveNet (NYSE: ABVT) may be known for sticking to its organic growth guns, but a Reuters report intimates that CEO William LaPerch is thinking about expanding the service provider's reach by acquiring other service providers.
"It wouldn't be out of realm of reality for us to make an acquisition if there is a good strategic reason to do it and it makes good financial sense," said LaPerch, who added that he holds discussions on a regular basis with other service providers about making possible deals.
Unlike Level 3 (Nasdaq: LVLT) and other smaller players like Zayo, which have made a number of acquisitions recently, including Global Crossing and 360networks, AboveNet has not struck any deals to buy other service providers.
LaPerch said the reason why AboveNet, a service provider that's been somewhat immune to the current economic environment, has not conducted acquisitions was that some of its targets wanted too much money for their assets.
News that the service provider is looking for deals follows a report in May that AboveNet could become a good takeover target itself.
One possible deal analysts believe would make sense for AboveNet would be Sidera Networks, a service provider formed out of the ashes of the former RCN Metro when private equity firm ABRY Group purchased it in 2010. Another report emerged in May that both Sidera and, separately, Fiberlight were also looking for buyers.
By acquiring a service provider like Sidera, AboveNet would gain more local fiber network assets to expand its own growing footprint to provide connectivity to data centers and financial companies in addition to targeting hospitals and large universities.
- Reuters has this article
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