Yesterday, One Communications said that it has hired Blackstone to serve as its advisor as it 'explores potential strategic alternatives'. One Communications is a mostly fiber-light CLEC serving the northeast and Midwest, and is just the right size morsel for some of the larger CLECs to gain scale in one bite. There is also the possibility of private equity interest, but IMHO a strategic buyer is more likely since there is less metro fiber involved.
The company already announced the sale of its Fibernet business in West Virginia to NTELOS, and it also owns a chunk of Fibertech which is also being sold off to Court Square. So a followup sale of the rest of the company can be seen as one more step along the same path. One is 50% owned by Columbia Ventures, which has long dabbled in telecom and fiber companies. With a healthy M&A environment this year, it appears that Columbia is looking to shift its portfolio around.
So who would buy One Communications? The first candidate that jumps to mind is PAETEC (news, filings), which has bought and integrated several assets of similar type and has the scale to pull it off again. But a competing idea would be Windstream (NYSE:WIN, news, filings), which could combine the assets with those of NuVox and its newest planned addition KDL/Norlight.
Or, potentially, the company could look for someone its own size or smaller and go for scale on its own. They could look to take out itcd and expand throughout the Southeast, or they could even work out a deal with lyns to build a bigger consolidation platform than that company is already working on. Or they could switch gears entirely and go try to buy Intellifiber, but that's probably too big a stretch.
Anyone have other thoughts?
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