NTELOS (NASDAQ: NTLS), a regional integrated wireless/wireline operator in West Virginia, is the victor in the race to acquire One Communications' FiberNet business for about $170 million.
By acquiring FiberNet, NTELOS will add about 3,500 route fiber network miles that cover all of West Virginia and into surrounding areas in Ohio, Maryland, Pennsylvania, Virginia and Kentucky. FiberNet was swept up into One Communications when it was formed during the merger of CTC Communications and Choice One Communications--which included a deal to acquire FiberNet's parent Conversent Communications in 2006.
FiberNet's agreement to be acquired by NTELOS comes after a report emerged in the Charleston Daily Mail last month that it was looking for a buyer. To fund the acquisition, NTELOS will use a combination of a permitted incremental term loan under the existing senior credit facility, availability under the undrawn revolver and cash on hand. After clearing FCC, necessary state regulatory approvals and antitrust approvals, NTELOS expects to close the deal in the fourth quarter this year.
"In addition to immediate financial contributions from the embedded customer base, this acquisition will provide NTELOS with new opportunities within our core business of providing high bandwidth services to large enterprises, government customers and carriers," said Frank L. Berry, NTELOS executive vice president and president of wireline operations in a release. "Consistent with our strategic growth vision, by increasing FiberNet's customer penetration and usage across our service area, we will further leverage operational and back office platforms already in place."
This is not the first major acquisition for NTELOS, however. Last October, the regional provider doubled its fiber network reach by acquiring a large portion of Allegheny Energy's fiber assets, a move that instantly doubled its fiber network from 2,300 to 4,500 route-miles.
FiberNet may be the latest deal in the ever-consolidating competitive service provider market, but it certainly won't be the last. Other rumors emerged in June that at least three other regional fiber providers--KDL, Alpheus and Fibertech, whose networks were built during the late 1990s Internet boom--are also up for sale, but nothing has been confirmed yet.
- see the release here
FiberNet could be heading to the auction block
NTELOS to expand fiber network presence
KDL, Alpheus and Fibertech fiber networks are up for sale