Here’s a quick catchup on recent news items:
Earthlink (NASDAQ:ELNK, news, filings) picked up a rather interesting win with the Milwaukee Public Schools facilitated by channel partner MC2. They have implemented a 228 site network with integrated voice and data, leveraging an E-Rate program grant. This deal is outside the footprint of the company’s recent purchases of Deltacom and One Communications, so this one probably derived from their New Edge business. I still expect EarthLink is looking to expand its fiber footprint further, inorganically.
Meanwhile, PAETEC (news, filings) has received early termination of the waiting period under Hart-Scott-Rodino for its proposed purchase by Windstream (NYSE:WIN, news, filings). The deal still surprises me, both that Windstream has the balls to go so far down the CLEC road and that Paetec was willing to sell at this stage.
And cbey announced a win on the cloud front. They will be delivering a cloud PBX solution for Pardot, an Atlanta-based interactive marketing software provider. Their old PBX hardware had been unable to scale with their business. CBeyond has moved actively over the past year to offer cloud-based services to the SMB, and is also currently working to move from a T1-based infrastructure to Ethernet.
Japanese giant NTT Communications (NYSE:NTT, news, filings) is adding another acronym to its as-a-service alphabet: UCaaS, which is of course Unified Communications as a Service. Their Arcstar unit will offer the new Cisco-powered product to its IPVPN customers. NTT is also expanding coverage of its SIP trunking offerings from just Singapore in May to 15 countries now and on to 30 countries by March.
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Categories: CLEC · ILECs, PTTs · VoIP
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Rob,
Regarding Paetec, you can now read the Winstream S4 which gives the background to the merger negotiations. Interesting reading. It would appear that there was other serious interest from “Company A” at a materially higher price ($6.80 in cash and stock) and interest from “Company B” that really didn’t get well defined because “B” was otherwise engaged and couldn’t get a definitive offer together in the time required.
My read is that “Company A” is EarthLink and “Company B” is possibly LVLT.
There is no real indication as to why PAET elected to sell in the first place beyond general statements that such discussions (buy or sell) had been going on since 2009.
Anyway, fascinating read, and we now know there are another two (at least) able and willing acquirors of CLEC assets out there who are capable of dealing in scale.
ERH, I read it differently. Company A would only own 56% of the proforma company implying a $643M mkt cap at the time of offer. Looks like CBB or CCOI were in that neighborhood, my bet would be on the latter.
ERH, Just went back and checked and given the earnings release date and integration of acquisitions it can’t be CCOI. ELNK fits all 3 of those conditions though.
schmuck,
ELNK also fits the market cap description of a merger in which the Paet shareholders would have had roughly 50% of the merged entity. ELNK is “Company A”.
no, that was my mistake I didn’t do a good enough job correcting in the follow-up post.
It was ELINK
I was not that surprised that PAETEC sold. That WIND bought them, yes. But PAAETEC has been a ship without a rudder for a while. No real organic growth. A mismash of companies and priorities.