The combining of the two companies would create an IP infrastructure and communications company serving 14 states in the southeastern United States. ITC^Deltacom’s fiber optic footprint spans 16,400 miles, with more than 12,400 miles owned or controlled under Indefeasible Right of Use agreements. It includes a 14-state Synchronous Optical Network backbone with 35 metro fiber rings, 294 colocations and 20 voice and data switches.
The combination of Earthlink’s ISP and IP communications business and ITC^Deltacom’s infrastructure will create a full-service IP infrastructure and solutions powerhouse, providing a comprehensive suite of Internet, telecommunications and managed services, according to the company.
“As the demand for high-quality IP infrastructure continues to rapidly grow, we see a significant opportunity to focus these combined IP networking and managed service capabilities with our strong balance sheet to meet this increasing demand from enterprise level customers, wireless carriers and multilocation national accounts while creating long-term value for our shareholders," said EarthLink chairman and CEO Rolla P. Huff in a release announcing the acquisition. “The capabilities we acquire with this acquisition will be complemented by our existing New Edge Networks business as we combine our nationwide MPLS network capabilities with Deltacom’s state-of-the-art infrastructure."
Earthlink, originally a consumer-focused ISP, has spent the last five years migrating into the business communications space. In 2005, the company purchased the assets of Aluria Software, which built security and protection products for consumers, small businesses and enterprise customers, and in 2006, it acquired business-CLEC New Edge Networks, signaling Earthlink’s move into the business-to-business communications space.
With the ITC^Deltacom buy, Earthlink is better poised to expand its communication offerings into other regions. “To compete successfully in today’s marketplace, size and scale are very important," said Randall E. Curran, ITC^Deltacom CEO. “We are pleased to become part of a leading company with enhanced resources."
Earthlink will continue to be headquartered in Atlanta and led by Huff. With the purchase, Earthlink will assume $325 million in debt, which is included in the acquisition price. A closing date for the transaction was not announced.