Taking stock of 2011's top mergers & acquisitions

Samantha Bookman, FierceTelecomWhat were the most important mergers and acquisitions in 2011? This year was a wild ride for the wireline segment of the telecom industry, with carriers and service providers jockeying for position in the fast-expanding business services market. It made for some interesting and even surprising M&A moves.

Windstream's (Nasdaq: WIN) deal for PAETEC was certainly an attention-getter, a move that positions Windstream as a nationwide business services provider. But even more interesting was Level 3 Communications' (Nasdaq: LVLT) acquisition of Global Crossing, a move that gave Level 3--which provides transport for a number of companies including online video provider Netflix (Nasdaq: NFLX)--direct reach into 50 countries and connections to over 70 countries.

It wasn't just the large carriers making acquisitions in 2011, either--smaller independent providers made buys as well, with most, just like the larger telcos, looking to bolster cloud and managed service portfolios to become more attractive to business customers.

Warwick Valley Telephone (Nasdaq: WWVY) and Twin Valley Telephone made strategic acquisitions in purchasing, respectively, Alteva and ISG. Both gained cloud and managed services assets that will help them bring in regional businesses and keep them competitive in the ever-shifting wireline market.

As it has in the past, consolidation became a watchword for 2011 among service providers. But unlike past M&A flurries, providers are making far more strategic moves, rather than consolidating just because their neighbors are doing so. Getting a piece of the cloud and managed services market isn't just a hot trend; it's becoming a must-have for providers of all sizes.

Paul Lidsky, CEO of Datalink (Nasdaq: DTLK), pointed out in a recent FierceTelecom interview that 2011 is the year that businesses are seriously looking at implementing cloud services.

"I think in 2011 you see a lot more implementation, or at least serious planning for it," he said.

That's a factor that telcos and service providers are looking to take advantage of, by becoming the go-to source for cloud services.

Take a look at our Most Important M&As of 2011 feature, and tell us in the comments: Which do you think were the most important? Are there any that you think we missed? Let us know.--Sam

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