Consolidation of the CLEC industry is in full swing at this fall's Comptel show as PAETEC (Nasdaq: PAET) moves to acquire Cavalier Telephone for $460 million in cash.
By purchasing Cavalier, PAETEC instantly gains nearly 17,000 fiber route-miles from Cavalier's Intellifiber Networks subsidiary to its existing fiber footprint to stay ahead of cable operators such as Cox and Comcast who are aggressively pursuing larger business customers.
This 17,000 fiber route-mile network will not only enhance its existing metro footprint with an additional 4,689 route miles, but the 12,262 route mile intercity network in the Midwest and Eastern U.S. In turn, PAETEC will have a local presence in 86 of the top 100 Metropolitan Statistical Areas (MSAs) with 10,609 metro fiber-route miles and 37,023 fiber-route miles in addition to 1,178 colocation sites.
When the deal is completed, Cavalier will become an indirect wholly-owned subsidiary of PAETEC Holding Corp. The boards of directors of both PAETEC and Cavalier have already approved the deal.
On the leadership front, Arunas Chesonis will maintain his role as company chairman and and CEO, while Keith Wilson will become Chief Financial Officer of the combined company. Danny Bottoms, Cavalier's current President and CEO said that he plans to join PAETEC's executive team.
Arunas Chesonis, chairman and CEO of PAETEC, said in a release that the "acquisition of Cavalier fits our strategic plan to add both fiber assets and regional density to better serve our customers and realize increased network synergies, both in the local loop and long haul."
Cavalier's president and CEO Danny Bottoms said that being acquired by PAETEC will enable it to "take advantage of a combined network and resources that are unmatched in the industry and build upon a common culture that is singularly focused on the customer."
For more:
- see the release here
- FierceCable's looks the deal's affect on cable
Related articles:
PAETEC Acquires Quagga
PAETEC furthers energy play with Energy Partners acquisition
FierceTelecom Leaders: Arunas Chesonis, Chairman and CEO of PAETEC