In a further development in the metro and regional M&A rumble that has been developing all year, regional operator nTelos (NASDAQ:NTLS, news, filings) has agreed to buy FiberNet, a division of One Communications. For a price tag of $170M in cash, NTELOS will be gaining some 3,500 miles of metro and regional fiber throughout West Virginia and extending into the surrounding states of Ohio, Maryland, Pennsylvania, Virginia and Kentucky.
This is the second such purchase in the past year by NTELOS, which itself had fiber in the area as well. Last fall the company purchased Allegheny Power’s 2,200 route miles which added depth in West Virginia while extending its footprint into Pennsylvania. With the addition of FiberNet, NTELOS appears to have the largest competitive fiber footprint in the region. With Verizon (NYSE:VZ, news, filings)”s now completed sale of much of its West Virginia footprint to Frontier Communications (NYSE:FTR, news, filings), the ILEC they will face most often will apparently be Frontier.
According to the PR, Fibernet did $76M in revenue in 2009, with $25M in EBITDA and $13M in capex. That pegs this deal at about 7xEBITDA, though for a different sort of asset than the recent purchases of Veroxity and AGL – more regional fiber and less metro, or so I understand.
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Categories: CLEC · Mergers and Acquisitions · Metro fiber
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What does this say for the direction One Communications is headed?
It certainly seems to suggest that One Communications is not planning to go deeper into the fiber side of things. One is owned by Columbia Ventures, which has other companies in its portfolio with a heavy fiber bias – this just won’t be one of them.