Conterra is dipping into its pocketbook again, signing a deal to acquire Louisiana-based regional fiber service businesses Network USA and Sun America, which are collectively known as Network USA (NUSA).
By acquiring NUSA, Conterra will increase its fiber presence by about 3,000 miles in two of its largest operating states, Louisiana and Texas, expanding its regional fiber footprint throughout the Gulf Coast/East Texas region. It also provides entry into two new states: Arkansas and Mississippi.
The NUSA fiber network is complementary to the assets of Conterra’s previously announced acquisition of Detel Communications, another Louisiana-based fiber network services provider.
“The people from Network USA and Conterra match well,” said Craig Gunderson, president and CEO of Conterra, in an interview with FierceTelecom. “In addition, the networks match like they were designed to fit together and it’s amazing how well it ties into what we have in Louisiana and East Texas, while further expanding our network reach into Arkansas and Mississippi.”
James Davis, president of NUSA, agreed, adding that it wanted to work with another provider that could help it advance its own mission.
“When we looked at this process, we were looking for a partner and Conterra fit really well,” Davis said. “When you look at the networks, we could just see how there was a tremendous amount of benefit of bringing the two organizations together.”
Financial details of the acquisition, which is subject to pending regulatory approvals, are not being disclosed.
Enhancing E-Rate, wholesale, retail
By acquiring NUSA, Conterra will immediately enhance its fiber network reach into school districts as well as its wholesale capabilities. Gunderson said that the NUSA acquisition enhances the services it provides to current E-Rate school district customers.
“It takes some of our school districts that we won with fiber and ties them together,” Gunderson said.
School districts, which procure telecom services via the FCC’s E-Rate program, have gained more freedom in recent years. In 2014, the FCC approved a $1.5 billion annual increase for the E-Rate program to help schools pay for broadband connectivity and network infrastructure. The FCC made several changes to the program that provide economic incentives to schools and libraries.
Besides bringing depth to the school districts, the acquisition will give Conterra greater retail enterprise and wholesale carrier depth.
“Today, we have a strong and growing carrier team and a set of relationships across the country,” Gunderson said. “With James and his team, it takes what our enterprise business is and dramatically strengthens it.”
Gunderson said that the products and network capabilities NUSA brings to the table will also enable it to leverage and extend the fiber it previously built out mainly for school districts to other entities.
“The product portfolio that Network USA brings to the table, and the way in which the networks are architected with what we have, really positions us to use the fiber that we had previously deployed for school districts now for all the verticals,” Gunderson said.
Network, people fit
NUSA has been rapidly growing its facilities-based lit and dark fiber network primarily in Louisiana and East Texas. The service provider serves the same industry customer segments as Conterra: wireless and wireline carriers, healthcare organizations, government and midsized as well as Fortune 500 enterprises.
“It’s incredible how well these two pieces fit together,” Gunderson said. “As we begin to work to integrate Network USA, we’re so pleased on how well this fits together.”
But the network assets are just one part of the equation. Unlike other acquisitions in which one service provider purchases another for their assets and dismisses the management team, Conterra is retaining the entire NUSA group.
“The more we do this planning the more excited I become not only about the network assets, but also the people and what they mean to our long-term success,” Gunderson said.
Davis agreed and added that NUSA’s staff is just as important as the fiber network and services it has built out.
“We’re excited about being part of Conterra because it keeps the Network USA team intact,” Davis said. “It wasn’t a situation where a company was looking to come in and say we want your assets and we don’t consider your people to be your assets. With Network USA being a small organization, we consider our people to be every bit as valuable as the physical asset we have in the ground.”