M&A Journal: Earthlink Strikes Again, Buys STS Telecom

March 2nd, 2011 by · Leave a Comment

Earthlink (NASDAQ:ELNK, news, filings) is moving further into the enterprise telecom space with yet another M&A transaction.  They have purchased yet another company, STS Telecom, adding to their purchases of Deltacom and the pending deal for One Communications.  STS Telecom serves SME customers in Florida and Georgia, which also happens to overlap nicely with that Deltacom footprint.  That Earthlink is still on the prowl is a given.  They clearly have a plan and cash flow to use to implement it

While the purchase price was not disclosed, the deal will add $15-18M to Earthlink's revenues this year, not to mention a hosted VoIP platform which seems to be the centerpiece of the deal.  Earthlink is no stranger to VoIP, having worked with several products aimed at the consumer, but this will give them a head start on the PBX side.  We can expect they will move swiftly to take that platform to their full footprint.

Although they are new one to me, STS Telecom also manages a national network via leased connectivity from partner networks.  But I find it interesting that this target adds more product depth than infrastructure.  Might they still find some fiber to add to their holdings or are they looking for products?

Categories: CLEC · Mergers and Acquisitions

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