Earthlink Buys Business Vitals

August 3rd, 2011 by · 8 Comments

As expected, Earthlink (NASDAQ:ELNK, news, filings) is not done with its inorganic push to build itself into a comprehensive business services provider.  This time, however, they didn’t buy a CLEC, but rather a managed services provider with a data center.  Earthlink announced yesterday that it is buying Business Vitals, a Columbia, South Carolina firm specializing in managed IT, security, and professional services.  

Combined with its recent launch of cloud services and the integration of assets from Deltacom and One Communications, Earthlink is clearly positioning itself to address the business services segment by adding managed services muscle as quickly as possible.  Business Vitals’ Tier IV data center in Columbia will help the company by providing disaster recovery and cloud infrastructure.

Financial details of the transaction were not disclosed, meaning this was not a large revenue acquisition but rather a capabilities acquisition.  I still expect that Earthlink is not done yet.  I strongly suspect their next move will be on network assets out west, where following the Winstream/PAETEC deal they may now find fewer buyers to compete with.

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Categories: CLEC · Mergers and Acquisitions

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8 Comments So Far

  • Anonymous says:

    Rob, thinking about what major CLECs Earthlink might acquire, do you think XO is a fit over there? Do they have the resources to pull a deal off?

    • Rob Powell says:

      If Icahn ever truly puts XO up for sale, then I am certain that Earthlink will be in the room and they’d have the resources to compete. Whether they would win or not depends on how much they want it, as always.

  • schmuckinsurance says:

    Is it just me or does anyone think this PAET/WIN deal and ELNK deal are related to there having already been an auction for XO. The conspiracy theory being that the first 3 were on the outside looking in as TWTC gave Icahn the nod on XO. Now Icahn is finally working to mop up the XO mess he created to get TWTC the assets they are paying for asap. With the deal in hand, Icahn finally has the motive and cash incentive necessary to settle with the litigants and take XOHO off the exchanges.

  • Anonymously says:

    Sorry…Are you sure the TWTC/XO deal is done?

    • Rob Powell says:

      It’s an attractive conspiracy theory, but it would be legally dangerous and Icahn is already getting more court scrutiny than he probably likes. If an auction had occurred, it would be undisclosed material information to current XO minority shareholders, and too many outsiders (e.g. the bidders) would know about it. Hence, I seriously doubt it.

      • en_ron_hubbard says:

        No it’s not an attractive conspiracy theory– it’s horrible and not even close to being remotely feasible– just plain bad. A D- conspiracy theory.

  • BeM says:

    Earthlink business has their main office in Vancouver, WA (not Atlanta)….Integra has their main office in Vancouver, WA….

    Let’s just say there are a few people that have worked together between the two.

    If Integra isn’t buying, they are selling – and should. Earthlink is a buyer and can do way more with the legacy ELI assets that Integra doesn’t know what to do with…territory is impressive, SoCal to Seattle, over to Las Vegas, SLC and great plains up to Minnesota.

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