Financially struggling CLEC One Communications has hired an investment advisor to help it pinpoint whether to buy complementary companies or sell to new owners and the latter option looks most realistic.
One already has taken drastic steps to cut debt its selling its FiberNet unit, for example, and shedding its minority stake in Fibertech Networks. But those moves arent panning out to be enough for the Massachusetts-based provider of voice and data services. In a Sept. 8 statement, One positioned its deal with Blackstone Advisory Services as an exploration of potential strategic alternatives[that] may include one or a series of merger and acquisition transactions.”
The announcement is not a shock. Privately held One earlier this summer received a lower credit rating from Standard & Poors over concerns about Ones ability to make near-term debt payments. One has had a hard time competing in the CLEC market, even after it became a larger company once CTC Communications, ChoiceOne Communications and Conversent joined forces in 2006.
One now sits in a tough position. It serves markets in the Northeast, Mid-Atlantic and Upper Midwest, regions where rivals such as PAETEC, Verizon Communications Inc., Broadview and XO Communications dominate. Plus, the CLEC sector has consolidated amid pressure to better compete and create more value for customers. One now says its turn could be next.
Strategic consolidation is important in our business,” One CEO Howard Janzen said in a prepared statement. The market expressed strong interest in our extensive network assets, stable on-net customer base and positive cash flow and we believe that continued transaction activity is an attractive option with a number of qualified partners.”
One expects to start pursuing M&A possibilities later this month and said the move will not impact its sales efforts or customer service.
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January 22 2019 @ 22:01:08 UTC