Warwick Valley Telephone (Nasdaq: WWVY) is making another move to continue its transformation being just another small town phone operator to becoming a bigger business services player by acquiring cloud and Unified Communications (UC) provider Alteva for $17 million in cash and stock.
To pay for Alteva, WVT will leverage about $11 million of its own on-hand cash and $4 million of its own common stock, in addition to $2 million in performance-based payments over the next year and a half.
The board of directors of WVT and Alteva have approved the deal, which has to meet necessary regulatory approvals and other conditions. The two companies expect the deal to be completed in Q3 2011.
When WVT completes the acquisition of Alteva, they will integrate their own CLEC business, USA Datanet--also a product of another acquisition--with Alteva's operations.
WVT said that by combining USA Datanet with Alteva it will be able to "better capitalize on the growth that both service providers had been experiencing independently in the fast growing market for UC and hosted applications for business and enterprise customers."
By offering more UC and hosted applications for business customers, WVT believes it will be able increase its consolidated revenues by about 30 percent on an annual basis.
While WVT may be a smaller regional ILEC and CLEC serving parts of New York and New Jersey, their acquisition of Alteva will instantly bolster its business service portfolio to compete against area cable operators that are also aggressively pursuing new business clients.
- see the release
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