Cinnabar Buys US Metro

January 14th, 2010 by · 3 Comments

Southwest Florida metro fiber provider US Metro is being sold to Cinnabar Ventures, 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.  In December they bought Rent-a-Genius.  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 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.

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Categories: Cloud Computing · Mergers and Acquisitions · Metro fiber

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3 Comments So Far

  • DaveRusin says:

    Hey, Cinnabar, give me a call at those multiples …

  • Anon says:

    Wondering if every established carrier was thinking the same thoughts……

    love to see what the number would be for others 🙂

  • DaveRusin says:

    Don’t get too excited … more or less to this than a press release … Cinnabar is a public company … looks more like a shell … either someone within mystery cash behind this or the analysts are getting punked.

    However, if you think about it — if a Cloud Computing Operator owned the fiber sheath as well — that is one hell of an advantage – integrated, reliable, cost, price, speed to deploy, network diversity and being different.

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