Tag Archives: acquisition

Zayo Group on Acquisition Path – Today it’s Arialink

After announcing that AboveNet will be acquired, the Zayo Group today Zayo Group logoannounces it has executed a definitive agreement to acquire Arialink, Mid-Michigan’s largest fiber optic service provider. The acquisition adds 930 new route miles to Zayo’s national footprint, including 400 miles of dense metro networks in Lansing and Ann Arbor. Arialink’s network will be interconnected with Zayo’s existing network, enabling end-to-end-Bandwidth Infrastructure services between Zayo’s existing 45,000 mile national network and Arialink’s extensive network in Michigan.

“Arialink has built a great business by extending their fiber-based Ethernet network to key businesses and government agencies in Michigan,” says Glenn Russo, Executive Vice President of Corporate Strategy and Development for Zayo Group. “We have worked with Arialink for some time and adding their reach to Zayo’s national network will allow us to offer a broader range of solutions to our collective customers.”

Arialink provides Ethernet, dark fiber and optical transport services to education, government agency and enterprise customers across its 437 on-net building footprint. Their regional long haul network provides connectivity to other markets throughout central Michigan. Arialink recently announced that it was awarded and has begun construction of a 190-mile network to interconnect major healthcare facilities as part of an FCC grant to the Michigan Public Health Institute. This unique network will support connectivity to healthcare facilities in rural parts of the state and bring broadband services to underserved communities.

“I believe the combination of Zayo and Arialink will create more opportunities to serve our customers as well as create career opportunities for many of our employees,” says Jason Schreiber, CEO of Arialink. “I am proud of what we have accomplished as an independent company and look forward to continuing our growth as part of Zayo.” Mr. Schreiber will join Zayo as part of the transaction and continue to drive the success of the Michigan business, leveraging the companies’ collective assets.

The transaction, subject to customary approvals, is expected to close during the second quarter of 2012. The acquisition, which will be funded with cash consideration of $18M, excludes assets and customers related to residential services which are being spun out to the previous owners of Arialink before close. Zayo also announced on March 19th, 2012 a definitive agreement under which Zayo will acquire AboveNet, Inc.

Polycom Completes Acquisition of HP Visual Collaboration Business Unit

Polycom, Inc. (Nasdaq: PLCM), a global leader in unified communications (UC), today announced the close of its acquisition of HP’s Visual Collaboration business, and the agreement under which Polycom will serve as an exclusive partner to HP for telepresence and certain video UC solutions, including both resale and internal HP deployments. The acquisition and agreement doubles Polycom’s immersive telepresence marketshare and further strengthens Polycom

Cisco Acquisition of newScale Completed

Cisco has completed its acquisition of privately-held newScale Inc., a provider of software that delivers a service catalog and self-service portal for IT organizations to select and quickly deploy cloud services within their businesses. Based in San Mateo, Calif., newScale allows commercial and enterprise customers to initiate the provisioning of their own systems and infrastructure on an as-needed basis.

Cisco’s cloud strategy is to harness the network as a platform for building and using clouds and cloud services.

TelePacific’s Covad Wireless Acquisition Completed

TelePacific Communications has received regulatory approval for and completed the acquisition of NextWeb, Inc., dba Covad Wireless, a broadband fixed wireless carrier operating in California, Nevada and the Chicago, Illinois area.

Through its acquisition of NextWeb, TelePacific now controls a WiMAX-featured wireless broadband network, a licensed microwave backhaul network, and a high bandwidth wireless network operating in licensed LMDS spectrum. The new network assets complement TelePacific’s existing footprint and allows the company to broaden its product offerings in markets where it is already competitive. Further, the purchase supports TelePacific’s strategy of investing in advanced broadband transport technologies.

TelePacific will also gain the benefit of approximately 3,500 profitable broadband fixed wireless business customers in California, Nevada and suburban Chicago.

“We are pleased to welcome Covad Wireless customers to the TelePacific family and look forward to introducing them to TelePacific’s signature customer service,” said Dick Jalkut, President and CEO of TelePacific. “The additional resources we gained through this acquisition

Qwest – CenturyLink Merger Completed

CenturyLink, Inc. (NYSE: CTL) and Qwest Communications today completed their merger, creating the nation’s third largest telecommunications company in the United States. The combined company’s increased scale and financial strength will enable it to deliver a broader range of communications services to consumers and small businesses throughout the company’s 37-state service area and to business, wholesale and government customers nationwide via its 190,000 route-mile fiber network.

“The combination of our two companies allows us to offer customers of all sizes an even more robust portfolio of communications solutions that will continue to be backed by honest and personal service,” said Glen F. Post, III, chief executive officer and president of CenturyLink. Continue reading

Cisco Videoscape Strategy Driven Acquisition of Inlet Technologies Completed

Cisco has completed its acquisition of privately-held Inlet Technologies, a leading provider of Adaptive Bit Rate (ABR) digital media processing platforms. Based in Raleigh, N.C., Inlet strengthens the capabilities of Cisco’s Videoscape TV platform, allowing service and content providers to deliver compelling video experiences to any device over any Internet Protocol (IP) network.

Cisco Videoscape is a comprehensive TV platform for service providers that brings together digital TV and online content with social media and communications applications to create a truly immersive home and mobile video entertainment experience. Inlet’s advanced ABR technology, which is used in streaming multimedia over managed and unmanaged networks, adapts the quality of the video stream based on real-time network conditions.

Inlet brings to Cisco a strong team that understands the complexities of delivering ABR video over IP networks to any device. With the close of the acquisition, Inlet employees become part of Cisco’s Service Provider Video Technology Group.

Under the terms of the agreement, Cisco paid approximately $95 million in cash and retention-based incentives in exchange for all shares of Inlet.

EARTHLINK TO ACQUIRE ONE COMMUNICATIONS

EarthLink, Inc. (NASDAQ: ELNK) today announced a definitive merger agreement under which EarthLink will acquire One Communications Corp. (One Comm) for $370 million, which includes payment of approximately $285 million of One Comm net debt. One Comm stockholders have the right to elect to receive the net merger consideration in the form of cash or EarthLink common stock. The transaction purchase price represents a multiple of approximately 3.7x Adjusted EBITDA (a non-GAAP measure, see definition in “Non-GAAP Information for One Communications Corp.” below) for the twelve months ended September 30, 2010, including $20 million in expected cost synergies and excluding one-time transaction costs. One Comm’s shareholders will retain liability for all costs relating to One Comm’s pending litigation with Verizon New York Inc. The merger has been approved by the Boards of Directors of both companies and the stockholders of One Comm.

The acquisition will provide EarthLink with:

  • a strong IP network footprint in the Northeast, Midwest, and Mid Atlantic regions;
  • overlapping connection cities with EarthLink Business (formerly Deltacom) long-haul routes in major markets including Washington, D.C., Baltimore, Philadelphia and New York City;
  • geographical expansion and scale for managed IP services product strategy supported by a talented One Comm employee base; and
  • a solid foundation for potential future acquisitions of revenue bases in the region.

One Comm, with corporate headquarters in Burlington, Massachusetts, and operational headquarters in Rochester, New York, is one of the largest privately held, multi-regional integrated telecommunications solutions providers in the United States. With approximately 1,500 employees, One Comm serves approximately 113,000 small and mid-sized business customers in 17 states across the Northeast, Mid-Atlantic and Upper Midwest, including the major metropolitan markets of Boston, New York, Philadelphia, Baltimore and the District of Columbia. One Comm’s products include a wide range of data, voice (both traditional and VoIP) and integrated voice/data solutions that scale with bandwidths ranging from T1s to fiber-based speeds. One Comm’s network consists of 629 collocations, connected by more than 11,700 route miles of fiber.

EarthLink plans to integrate One Comm into its newly established EarthLink Business division, which currently consists of products and capabilities of its former New Edge Network, Deltacom and EarthLink Business Solutions divisions. After the closing of this transaction, EarthLink Business will operate a nationwide IP network with underlying fiber assets in 30 of the top 50 MSAs in the country. The combined fiber network will span approximately 28,000 route miles across 27 states, with 923 collocations, 55 IP and circuit-based switches and 68 metro fiber rings. With the addition of One Comm, EarthLink will have nearly 3,500 employees nationwide.

“The acquisition of One Communications is a significant development in further transforming EarthLink into one of the largest IP services companies in the U.S. We will now have a fiber-based IP network that covers a substantial portion of the key business markets across the eastern half of the United States, as well as substantial revenue and EBITDA scale in our strategic line of business,” said EarthLink Chairman and Chief Executive Officer Rolla P. Huff. “We fully recognize the declining trend line of One Comm’s revenue and EBITDA as the company has struggled to deal with the uncertainty of their debt covenants and pending litigation. We have taken the opportunity to acquire their network assets and customer base at an attractive valuation multiple. We are confident that EarthLink’s nationwide IP service offering, substantial free cash flow, strong balance sheet, and strong track record of customer service and operating excellence will add meaningful stability to the financial and operating performance of the company.”

“As part of our evolution, our management team and Board of Directors have carefully evaluated our capital structure alternatives for our transformed business. Given the substantial opportunities we believe exist for continued value creation by investing in our strategic line of business, the Board of Directors has decided to adjust the EarthLink quarterly dividend rate to $0.05 per share. We are pleased that EarthLink will be uniquely positioned in this industry to offer its shareholders a dividend yield,” added Huff.

EarthLink ended the third quarter of 2010 with $572 million in cash and marketable securities pro forma the recent closing of its $527 million acquisition of ITC^DeltaCom. EarthLink’s share repurchase program has approximately $146 million available under the current authorization.

Pro Forma Financials

On a pro forma basis, for the 12-month period ended September 30, 2010, EarthLink and Deltacom together with One Comm would have generated approximately $1.64 billion in revenue, $1.15 billion of which is from its combined business services segments. During this period, One Comm generated $79 million in Adjusted EBITDA (a non-GAAP measure, see definition in “Non-GAAP Information for One Communications Corp.” below). EarthLink expects to achieve annual cost synergies of approximately $20 million to be fully realized on a run rate basis by the end of the third year after closing.

All of One Comm’s outstanding indebtedness will be paid by the shareholders of One Comm from the cash proceeds of the merger.

Transaction Terms and Structure

The agreement provides for EarthLink’s acquisition of One Comm by means of a merger of a newly formed indirect subsidiary with and into One Comm, with One Comm surviving as an indirect wholly owned subsidiary of EarthLink. The agreement contains customary representations, warranties, covenants, closing conditions and escrow and indemnification protection.

The closing of the merger is subject to the satisfaction of several conditions, including receipt of required regulatory approvals from the Federal Communications Commission and certain state public utilities commissions and expiration or termination of the waiting period under the Hart-Scott-Rodino Act. Subject to the fulfillment of these conditions, the transaction is expected to close in the first half of 2011.

Greenhill & Co. LLC acted as financial advisor to EarthLink and rendered a fairness opinion to the EarthLink Board of Directors in connection with the transaction. Houlihan Lokey Capital, Inc. also rendered a fairness opinion to the EarthLink Board. King & Spalding LLP was EarthLink’s M&A legal counsel. Blackstone Advisory Services L.P. acted as financial advisor to One Comm, and Kelley, Drye & Warren LLP was its legal counsel.

Conference Call

EarthLink will host a conference call to discuss the transaction today at 8:45 a.m. Eastern Time Those wishing to participate in the call should dial 800-706-0730 (U.S. and Canada) or 706-634-5173 (international) approximately 10 minutes prior to the start of the call and reference the “EarthLink Conference Call.”

A listen-only webcast will be available at http://ir.earthlink.net/index.cfm. A replay of the call will be available two hours after the call by dialing 800-642-1687 Passcode 33481648.

Cautionary Information Regarding Forward-Looking Statements for EarthLink, Inc.

This press release includes “forward-looking” statements (rather than historical facts) that are subject to risks and uncertainties that could cause actual results to differ materially from those described. Although we believe that the expectations expressed in these forward-looking statements are reasonable, we cannot promise that our expectations will turn out to be correct. Our actual results could be materially different from and worse than our expectations. With respect to such forward-looking statements, we seek the protections afforded by the Private Securities Litigation Reform Act of 1995. These risks include, without limitation, the successful completion of the pending acquisition of One Communications Corp., including the receipt of required regulatory approvals; the ability to realize expected synergies, cost savings and growth opportunities; the possibility that the anticipated benefits from the acquisition cannot be fully realized or may take longer or present greater cost to realize than expected; our ability to successfully integrate the operations of One Communications Corp. upon its acquisition without detracting from our current operations; our ability to execute our acquisition strategy; and other unforeseen difficulties that may occur. These risks and uncertainties also include (1) that the continued decline of our consumer access subscribers, combined with the change in mix of our consumer access subscriber base from narrowband to broadband, will adversely affect our results of operations; (2) that we will have less ability in the future to implement cost reductions to offset our revenue declines, which will adversely affect our results of operations; (3) that we face significant competition which could reduce our profitability; (4) that adverse economic conditions may harm our business; (5) that we may not be able to execute our business strategy for our Business Services segment, which could adversely impact our results of operations and cash flows; (6) that our commercial and alliance arrangements may not be renewed or may not generate expected benefits, which could adversely affect our results of operations; (7) that our business is dependent on the availability of third-party telecommunications service providers; (8) that we may be unable to retain sufficient qualified personnel, particularly in light of recent workforce and cost reduction initiatives and in a recovering economy, and the loss of any of our key executive officers could adversely affect us; (9) that we may be unsuccessful in making and integrating acquisitions into our business, which could result in operating difficulties, losses and other adverse consequences; (10) that if we do not continue to innovate and provide products and services that are useful to subscribers, we may not remain competitive, and our revenues and operating results could suffer; (11) that our business may suffer if third parties used for customer service and technical support and certain billing services are unable to provide these services or terminate their relationships with us; (12) that interruption or failure of our network and information systems and other technologies could impair our ability to provide our services, which could damage our reputation and harm our operating results; (13) that government regulations could adversely affect our business or force us to change our business practices; (14) that privacy concerns relating to our business could damage our reputation and deter current and potential users from using our services; (15) that we may not be able to protect our intellectual property; (16) that we may be accused of infringing upon the intellectual property rights of third parties, which is costly to defend and could limit our ability to use certain technologies in the future; (17) that if we are unable to successfully defend against legal actions we could face substantial liabilities; (18) that our business depends on effective business support systems, processes and personnel; (19) that as a result of our continuing review of our business, we may have to undertake further restructuring plans that would require additional charges, including incurring facility exit and restructuring charges; (20) that we may be required to recognize additional impairment charges on our goodwill and intangible assets, which would adversely affect our results of operations and financial position; (21) that we may have exposure to greater than anticipated tax liabilities and the use of our net operating losses and certain other tax attributes could be limited in the future; (22) that we may reduce, or cease payment of, quarterly dividends; (23) that our stock price may be volatile; (24) that our indebtedness could adversely affect our financial health and limit our ability to react to changes in our industry; (25) that provisions of our second restated certificate of incorporation, amended and restated bylaws and other elements of our capital structure could limit our share price and delay a change of management; (26) that we may be unsuccessful in integrating our acquisition of ITC^DeltaCom, which could result in operating difficulties, losses and other adverse consequences; and (27) that we are exposed to additional risks specific to ITC^DeltaCom’s business and industry, which could adversely affect our financial condition, results of operations and cash flows. These risks and uncertainties, as well as other risks and uncertainties that could cause our actual results to differ significantly from management’s expectations, are not intended to represent a complete list of all risks and uncertainties inherent in our business, and should be read in conjunction with the more detailed cautionary statements and risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2009 and our Form 10-Q for the period ended September 30, 2010.

Windstream Acquisition of Hosted Solutions Completed

Windstream Corp. (Nasdaq: WIN) has completed its acquisition of Hosted Solutions Acquisition, LLC (Hosted Solutions) from ABRY Partners in an all-cash transaction valued at $310 million. Windstream financed the transaction through cash and revolving credit borrowings.

Hosted Solutions, based in Raleigh, N.C., is a leading regional data center and managed hosting provider focused on enterprise-class Infrastructure as a Service (IaaS) solutions (managed hosting, managed services, colocation, cloud computing and bandwidth) for small and medium-sized business customers as well as large enterprises.

Hosted Solutions operates five state-of-the-art SAS 70 Type II certified data centers in Raleigh, N.C.; Charlotte, N.C., and Boston and serves more than 600 customers. Windstream now operates a total of 12 data centers in eight states.

Windstream will be able to fully amortize the purchase price goodwill over 15 years, resulting in expected tax benefits with an estimated net present value of $52 million.

Windstream estimates the transaction will be accretive to free cash flow in the first year after expected annual synergies of approximately $1.5 million in operating expense savings and excluding integration charges.

Additional Information

The Bank Street Group LLC and Stephens Inc. acted as financial advisers and Kutak Rock LLP acted as legal adviser to Windstream on the transaction. Kirkland & Ellis LLP acted as legal adviser to ABRY Partners and Hosted Solutions.

Cautionary Statement Regarding Forward-Looking Statements

Windstream claims the protection of the safe-harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements, including statements regarding the expected benefits of the acquisition, are subject to uncertainties that could cause actual future events and results to differ materially from those expressed in the forward-looking statements. These forward-looking statements are based on estimates, projections, beliefs and assumptions that Windstream believes are reasonable but are not guarantees of future events and results. Actual future events and results of Windstream may differ materially from those expressed in these forward-looking statements as a result of a number of important factors. Factors that could cause actual results to differ materially from those contemplated above include, among others: the possibility that the anticipated benefits from the acquisition cannot be fully realized or may take longer to realize than expected; the possibility that costs or difficulties related to the integration of Hosted Solutions operations into Windstream will be greater than expected; the ability of the combined company to retain and hire key personnel; and those additional factors under the caption