CTC Communications and Choice One Communications announced today they are merging to create one of the largest CLECs in the United States, and the largest privately held CLEC in the Northeast.
The merger creates a behemoth competitor to carriers such as InfoHighway, one of the largest CLECs in the Northeast created by the merger of Eureka and InfoHighway. That combined company, which now goes by the name InfoHighway, counts annual sales of more than $100 million, and serves approximately 14,000 SMBs with 150,000 access lines in 14 Northeastern and Mid-Atlantic states.
The combined CTC and Choice One, on the other hand, will generate more than $550 million in annual revenue, and serve more than 100,000 customers via 1 million access line equivalents. The companies executives also said the combined network will have 7,000 route miles of fiber connecting 630 colocations.
Choice One is headquartered in Rochester, N.Y. It offers bundled voice and data services, along with Web hosting, design and development in 29 markets and 12 states in the Northeast and Midwest. CTC, headquartered in Waltham, Mass., specializes in VoIP services in 11 markets. Last year, it acquired Lightship Telecom and Connecticut Broadband. The two companies networks overlap in seven states from Maine to Pennsylvania.
It has become clear that in order to prosper in a competitive sector we should respond to the recent mega-mergers of the dominant incumbent phone companies, said Kenneth D. Peterson Jr., chairman of CTC and CEO of Columbia Ventures, which owns CTC. Both companies understand the power of synergies from this combination and believe in the necessity of continuing consolidation.
Peterson will serve as chairman of the board of the combined organization, which will consist of an equal number of directors appointed by the shareholders of each company. Thomas J. Casey, chairman and CEO of Choice One, will serve as CEO, while Ray Allieri, president and CEO of CTC, will serve as president.
The merger of Choice One and CTC once it has received standard approvals, and refinanced existing bank debt. The name of the merged entity has not yet been determined.
Current shareholders of Choice One and CTC each will own exactly 50 percent of the combined firm. The Choice One Board was advised by The Blackstone Group L.P.s Corporate Advisory Services team, Akin Gump Strauss Hauer & Feld LLP, and Mintz Levin Cohn Ferris Glovsky & Popeo P.C. Choice Ones largest shareholder is an advisee of Camulos Capital LP. The CTC Board was advised by Columbia Ventures Corp. and Kelley Drye & Warren LLP.