US broadband provider EarthLink, which formed in 1994, has agreed to acquire fibre-optic network operator ITC DeltaCom for USD191 million plus debt, the Wall Street Journal reports. The company’s debt is estimated at USD325 million, taking the total value of the transaction to USD516 million. In the face of declining revenues and reduced subscriber figures, Earthlink is reportedly keen to place a heavier emphasis on business customers, and reportedly plans to consolidate ITC DeltaCom’s operations with its own business-services arm, New Edge Networks.
DeltaCom, which is based in Huntsville, Alabama, has a 16,400-mile fibre-optic network in the Southeast of the country, serving more than 32,000 small and medium-size businesses, wholesale customers and government agencies. Its network includes a fourteen-state synchronous optical network backbone with 35 metro fibre rings, 294 co-locations and twenty voice and data switches. EarthLink CEO Rolla Huff commented: ‘It was important to acquire a company big enough to meaningfully transform EarthLink. It’s a network asset that’s been well fed with a reasonable amount of investment. This network can’t easily be replicated.’ As at June 2010, Earthlink reported 792,000 retail subscribers. The deal is expected to close in the fourth quarter 2010 or the first quarter of 2011.