Time for a quick Wednesday roundup of news from the last few days from network operators, large and small.
Time Warner Cable made good on its blockbuster purchase of DukeNet. On Monday they closed the deal, adding 8,700 route miles of fiber in North and South Carolina. That makes TWC Business Class a major player in the regional fiber business, both of the wireless backhaul and enterprise variety. One wonders if TWC has further M&A of this type in mind.
Out in Nebraska, Unite Private Networks has won an expanded relationship with Kidwell. The integrated solutions provider needs more bandwidth between its Lincoln and Omaha offices. Nebraska is one of UPN’s strongest regional markets, especially since the acquisition of Zito Media’s fiber network in the area a year or two back.
FiberLight says it has finished up a redundant fiber ring in northern Virginia for LINX’s NoVA effort. LINX has been putting together a Euro-style interconnection platform for the DC metro area as part of the Open-IX project. FiberLight’s expansive fiber network in the region is a natural fit to help hook up the data centers involved.
GTT has added a bit of new financial firepower to its balance sheet. They’ve doubled their senior credit facility to $15M and amended their mezzanine credit facility with up to another $10M of draw commitment. That suggests that following the purchase of Inteliquent’s network they are still hungry for more M&A.
Level 3 updated its financial guidance for interest expense in Q4 to reflect all the balance sheet moves they’ve been making. While GAAP net interest won’t move, a bunch of net cash interest expense was moved forward into Q4, meaning they now expect it to tip the scales at $675M rather than $645M. They will also have a loss of $57M or $0.25 per share as a one time impact to Q4’s EPS. They’ve been doing a lot to make 2014 solidly profitable, but the biggest thing the market wants to see when their numbers come out is an accelerating growth rate.
And Orange Business Services made an inorganic move to boost its position in the security vertical. They have acquired the French cyberdefense specialist Atheos, which they will combine with their own efforts to create an ‘Orange Cyberdefense’ offering. In the rapidly evolving, Snowden-shifted world of security, we’re going to see more deals like this.
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Categories: Financials · Internet Backbones · Mergers and Acquisitions · Metro fiber
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Hi Rob, Curious your thoughts on TWC’s acquisition of DukeNet and potential further inorganic growth when they are looking at selling off the business to Comcast/Charter/other. Would they split up the assets between a consumer and an enterprise business and only sell off the cable side? Thanks.
It’s hard to tell what would happen in a mega-cable merger of course. But I suspect that the motivations don’t change. Whether it’s Comcast or Charter or some hybrid deal, everyone involved has ambitions in the enterprise space. And the bigger they get as the result of consolidation at the cable level, the better the overlap with various metro fiber assets out there for further inorganic moves.