A $460 million all-cash deal has been reached for New York telecommunications company Paetec Holdings Corp. to acquire locally-based Cavalier Telephone.
The companies announced the agreement this morning, which is now pending regulatory approval. It is expected to close in the next four to six months.
Through the deal, Paetec will control a total of 37,000 miles of fiber optic cable.
The Wall Street Journal has more on the deal’s significance:
The overlap will allow Paetec to enrich the communication services it offers existing customers, said Mr. Chesonis, who will be CEO of the combined company. He added that Paetec, which had $1.6 billion in 2009 revenue, could play the role of a “consolidator,” buying up more fiber assets around the country.
The demand for fiber networks is growing at double-digit percentages per year as more people send data-heavy audio and video files over the Internet, according to industry estimates.
Cavalier is held by Boston-based private equity group M/C Venture Partners.
Interesting, doesn’t surprise me much though. I’ve had good service from both companies and both support departments work hard to make sure problems are solved in a timely manner. Looks like a good fit to me.
Another Richmond company bites the dust.