Qwest Buys OnFiber

Level 3, has been steadily acquiring companies in an effort of trying to get a better grip on the banadwidth market place, which is resurging because of growing demand from new digital application providers. Now Qwest has jumped into the fray, and has just acquired OnFiber Communications, a San Antonio, TX based provider of metro ethernet services for $107 million in stock. Update: The company had raised nearly $146 million in funding over the course of its five year life…..

This is a company that was started by Infinera co-founder Jagdeep Singh, and was one of the telecom investments by Kleiner Perkins Caufield & Byers. I have written about the start-up, which survived the downturn, and now operates all-optical network in 23 metropolitan areas.

As an aside, Danny Bottoms, the CEO of OnFiber had worked with Qwest back in the day when company was getting started. And now he has come the full circle. (This story is chronicled in Broadbandits: Inside the $750 Billion Telecom Heist)

Back to the deal, OnFiber will have sales of $60 million in revenues and roughly $15M in EBITDA in 2006. UBS Research says that Qwest will continue to look at opportunities to acquire out-of-region CLEC assets as a means to reduce its third party access costs. They also think that the Qwest “management is focused on acquisitions with relatively short paybacks and easily identifiable synergies.”

loading

Comments have been disabled for this post