Cinnabar Buys US Metro

Southwest Florida metro fiber provider US Metro is being sold to Cinnabar Ventures ^[1], which is a new technology company focusing on cloud-based network solutions.  US Metro, which operates fiber in Lee and Collier counties, isn’t the largest metro fiber company around, having just past the $2M annual revenue mark.  But the price tag of $18M is some 9 times revenue, which implies a hefty EBITDA multiple and reflects the value of the assets in the ground.

As for Cinnabar, they seem to be putting together an intriguing puzzle.  In October Richard Granville purchased a controlling interest in the company, and has since been shopping.  In November, they bought Yippy ^[2].  In December they bought Rent-a-Genius ^[3].  And now in January they are buying US Metro.  So we take a web-based OS, some network IT training specialists, and a pile of metro and regional fiber plus on-net buildings in southwest Florida and what do you have?  No really… what do you have?

According to Ed Gubbins over on ConnectedPlanet, they are putting together a six city cloud-managed LAN service ^[4] that will be offered to SMEs across their footprint.  Along with US Metro’s fiber, they apparently have leased capacity of some sort from Level 3, and have plans to enter Atlanta.  The idea seems to be to build a vertically integrated, cloud-based communications company.

Combining cloud computing and metro fiber in this way is something I haven’t really seen before now.  Since the ‘cloud’ is a term with a different meaning for just about everyone, it’s kind of hard to pin down.  I’ll guess I will have to wait to pass judgment on this business model when we see it in action.  I do think there are still some pieces missing to this puzzle, and hence I think we will be hearing more from Cinnabar as 2010 continues.