EarthLink announced plans to acquire ITC^DeltaCom, a leading provider of integrated communications services to customers in the southeastern United States, for $3.00 per share in cash – representing a implied value of approximately $516 million, including assumption of $325 million in debt.
The acquisition will enable EarthLink to create a leading IP infrastructure and solutions company by combining its existing ISP and IP-focused businesses with Deltacom’s integrated communications business.
Deltacom operates a 16,400 mile fiber optic infrastructure in the Southeast — over 75% of which is owned or controlled under Indefeasible Right of Use (IRU) agreements — including a 14-state SONET backbone with 35 metro fiber rings, 294 collocations and 20 voice and data switches. Deltacom currently serves over 32,000 small and mid-size businesses, multi-location enterprises, government agencies and wholesale customers in the southeast with services including MPLS and IP.
“The capabilities we acquire with this acquisition will be complemented by our existing New Edge Networks business as we combine our nationwide MPLS network capabilities with Deltacom’s state-of-the-art infrastructure. The combined company will be especially well positioned to serve Fortune 1000 companies across the country, one-quarter of which are headquartered in Deltacom’s footprint. In addition, the Deltacom assets will enable us to further reduce our consumer ISP cost structure, which we believe will result in additional incremental cash flow from that business in years to come,” said EarthLink Chairman and Chief Executive Officer Rolla P. Huff.
http://www.earthlink.com/http://www.deltacom.com/
