New York-based Fusion has announced that it has entered into a definitive agreement to acquire the Cloud and business services customers, operations and infrastructure of privately-held Birch Communications – which represents the majority of Birch’s current revenues. The combination is expected to create a provider with more than 150,000 business customers and a 100% IP-based network, including 30 data centres, 31,000 fibre route-miles of network, and metro fibre assets in eleven major markets. The acquisition will not include Birch’s legacy consumer and single-line business customers, which have lower profitability and ARPU, as well as higher churn rates, Fusion notes.
Although Fusion’s management will run the combined company, private equity firm Birch Equity Partners – Birch’s majority owner – will own 75% of the new company, while Fusion shareholders will own a 25% stake. The transaction is expected to close by the end of 2017, subject to customary approvals and closing conditions.