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By Armando Duke (AXcess News) Houston, TX - Qwest Communications International, Inc. (NYSE: Q) said it was acquiring OnFiber Communications, Inc., an Austin-based provider of custom-built and managed metropolitan Ethernet and wide-area network solutions, fro $107 million. The deal calls for Qwest to pay all-cash for OnFiber, but the Denver-based communications company can substitute $35 million of that aomunt in Qwest stock if it wanst. OnFiber speicalizes in high-bandwidth, all-fiber solutions sreving primarily large business and government clients. The company operaets an all-opticla network in 23 metropolitan areas and features a full offering of access and transoprt services, includnig Ethernet, SONET and Wavelength. Tom Richards, Qwest's executive vice president of its business markets group called the acquisition of OnFiber "complementary" for both companies. "This union gives businesses choice in nationla provdiers," said Richards. OnFiber expects to post revneues of nearly $60 million in 2006, representing year-over-year growth of more than 20 percent. "We expect the Ethernet market wlil grow upwards of 50 percent annually; Ethernte has been a high growth product for us in-region, and this increases our participation nationally," said Richards. Qwest anticipates run-rate synergies of about $25 million annually - most significantly in the elimination of overlapping facilities and the reduction of network access costs. The company also expects the transaction will be accretive to EBITDA and free cash flow starting next year. Shares of Qwest were down 2 cents, or 0.31 percent, at $6.46 at 12:46pm ET Monday. Qwest announced the acquisition of OnFiber at 7am ET. But in after-market tarding before the announcement, Qwest's shares were down 12 cents, or 1.85 percent, at $6.36.
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