EarthLink Inc., an IP infrastructure and services company, has completed the acquisition of One Communications Corp. (One Comm), one of the largest privately-held, multi-regional integrated telecommunications solutions providers in the U.S.
The acquisition consideration is approximately $370 million, which includes repayment of approximately $282 million of One Comm net debt and the issuance of approximately 3 million shares of EarthLink common stock. Approximately $21 million is being deposited into escrow to fund potential One Comm post-closing obligations under the merger agreement.
With the close of the transaction, EarthLink will integrate One Comm into its "EarthLink Business" division. The EarthLink Business IP network now spans more than 28,000 route miles across 27 states with more than 1,300 colocations, 55 switches, and 71 metro fiber rings. The company is well positioned to provide secure MPLS-based IP services to a range of multi-location customers across the nation, according to a spokesperson.
"The acquisition of One Communications is a significant development in further transforming EarthLink into one of the largest IP services companies in the U.S. We now have a fiber-based IP network that covers a substantial portion of the key business markets across the eastern half of the U.S., as well as substantial revenue and EBITDA scale in our strategic line of business," says EarthLink Chairman and Chief Executive Officer Rolla P. Huff. "We see tremendous value in the 1.6 million customer relationships we have across the new EarthLink and future growth potential in pursuing value-added managed services over our ubiquitous IP connectivity."
EarthLink will be updating its financial guidance for 2011 to include the impact of the One Comm acquisition when it issues its first quarter 2011 financial results.