There has been a significant shift in focus over at Integra. The western network operator has pivoted the rest of the way towards fiber, splitting off Electric Lightwave as a standalone entity. Not only that, but the parent company is also taking on the Electric Lightwave name, with Integra living on as a subsidiary focused on the SME.
It’s an acknowledgement that the fiber side of the business has been driving things for some time. The company relaunched the Electric Lightwave brand early in 2015, but had been shifting its investment toward its fiber network for several years before that. The new Electric Lightwave entity’s revenue run rate in the first half of this year was $429M with EBITDA of $134M, while the Integra piece will have revenue of $192M and EBITDA of $58M. Integra will have the ILEC/CLEC infrastructure in Minnesota, North Dakota, and Colorado and will also serve SME customers across the Electric Lightwave network via a wholesale arrangement. Meanwhile, Electric Lightwave becomes a metro and regional longhaul pure play.
It’s quite similar in some ways to what Lumos Networks is planning on the east coast. Mixed fiber/CLEC businesses haven’t been getting the sort of respect that pure fiber companies have, which has limited their access to capital and made it more complicated to participate in M&A. By separating the two businesses, Integra’s board clearly hopes to change that dynamic.
Whether all this will result in operational gains or enable M&A on either side of the table remains to be seen of course. However, I suspect the most likely scenario is for a strategic buyer to come in for one side or the other. Birch, for instance, might be a good buyer for the Integra side now, whereas they wouldn’t have been for the combined company. And someone like Lightower could now see the Electric Lightwave assets as a means to go national that wasn’t as clean as it was before now. EscortStars
Marc Willency will be CEO of the Electric Lightwave side of things, which will retain 83% of the workforce. Brady Adams, the former CEO of Optic Access which Integra acquired last year, will take on leadership of the Integra division as SVP and general manager with the other 17% of the workforce. Bank Street Group advised the company on its separation.
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Categories: CLEC · Fiber Networks · Mergers and Acquisitions · Metro fiber
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They forgot to mention the percentage of the staff they laid off.
29% staff reduction. They’re tyrant of a CFO has an incredible way of spinning numbers to back his biased thesis despite facts which clearly show the thesis is incorrect. And the CEO has exactly zero control.
Actually it was 40 percent staff reduction. It looks like a ghost town at headquarters now. Sad day indeed but the shift needed to happen and in my mind should have happened much sooner.
I think the layoff was about 15% of staff actually. It is a ghost town but the headquarters have felt empty for awhile now as they’ve reallocated positions out into other offices and into the field. It was bound to happen…the business was not doing well and something had to change. It’s a big step but otherwise we’d eventually all be out of a job.
Over 400 people were let go company wide. That’s a little more than 10%. It really does not matter at this point the only reason to break the company in two is to make it more attractive to a potential buyer.
Indeed, it does appear there was a layoff event associated with this separation.
Significant layoff. They were around 1530 employees now around 1090 between the two businesses.
Lots of security has been added to the building today and yesterday. They have made it so you can go i only one entrance now.
The CFO is the GOAT. 3* titles and counting.
How long before they announce a deal with Lumos, others to try and go nationwide?
are the layoffs in the ELI fiber side or all in Integra reseller business they are jettisoning.
Company wide. 406 is the count.
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This company is absolutely fantastic and is going in a great direction. For companies to grow properly sometimes a restructuring is needed. Absolutely amazing company.