Birch Communications confirmed that it is moving forward with its acquisition of Primus, expanding its service footprint with over 250,000 business and consumer customers. The deal also includes 20,000 customers in the United States and Puerto Rico.
Financial terms of the acquisition were not disclosed.
Birch said that the two companies complement each other from a product perspective, with each offering broadband Internet, cloud-hosted PBX, dedicated data access, local phone, long distance and a variety of wholesale services.
Vincent Oddo, president and CEO of Atlanta-based Birch, said in a release that the acquisition will provide benefits to Birch and Primus' customers alike. Primus customers will be able to get access to a broader set of services and customer care, while Birch's business customers will get access to a larger serving territory that will now reach into Canada.
"A significant portion of our current enterprise customers do business in Canada and are interested in expanding their existing services due to our larger presence," Oddo said. Birch will be one of a select group of service providers who can serve businesses across both the U.S. and Canada.
Being able to provide services into Canada -- particularly in major cities like Vancouver, Toronto, Ottawa, London and Edmonton -- will make Birch a more competitive threat to U.S. providers that don't have such access yet.
However, Birch is hardly alone in its desire to target Canada's business market. The service provider will also face off with a now more powerful Zayo Group, which made its entry into Canada when it purchased Allstream earlier this year.
Oddo said that with the "addition of the Primus assets, Birch expects that a significant portion of its revenue in 2016 will come from its fast-growing fiber and managed services segments."
Following a series of quarterly revenue declines, the formal announcement of this deal comes after Primus was granted court protection from its creditors in January to gain permission to sell itself off to Birch.
Set to close in the second quarter of 2016, this deal will mark the 28th acquisition Birch has made since its inception.
The Primus acquisition also fits in with the CLEC's tuck-in strategy to purchase assets that will increase its customer density and expand its IP network.
Besides Primus, Birch has purchased over a dozen other smaller competitive providers, including Cbeyond and Lightyear Network Solutions.
Acquisitions are only one part of Birch's growth strategy. The service provider is also taking a two-part approach to expanding its network: rolling out its own fiber to buildings and purchasing long-term fiber indefeasible rights of use (IRUs) from other network partners.
In addition to building out fiber to 1,000 buildings itself, the service provider in December 2015 struck deals with a number of service provider partners to expand its fiber presence into 1 million buildings.
- see the release
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