Minnesota-based communications services provider HickoryTech Corp. (NASDAQ:HTCO) says it plans to further expand its service footprint by acquiring IdeaOne Telecom Group, LLC, a metro CLEC and fiber optic network services provider in Fargo, ND and Moorhead, MN. HickoryTech will pay at $28 million in cash, with “routine adjustments” for capital expenditures and working capital, the company says.
“This acquisition further advances our strategy of growing our business and broadband services,” said John Finke, HickoryTech president and CEO. “Last year, we extended our fiber network to Fargo. This transaction gives us immediate access to the market, making our entire portfolio of business services available to IdeaOne customers. The completion of our broadband stimulus route from Brainerd, MN, to Fargo, ND, in 2012 will further enhance our capabilities and services in this market.”
IdeaOne recorded fiscal 2010 revenue of $11.1 million, the majority of which was from business customers. HickoryTech expects to pick up approximately 1,900 business customers and 1,700 residential customers when the deal closes, a milestone expected to occur in the first quarter of next year. The company also will add 225 fiber route miles to its regional network, connecting 650 on-net fiber-lit buildings as well as colocation facilities.
“We are confident HickoryTech and Enventis will provide quality support and expanded services to IdeaOne customers,” said Bob Johnson, IdeaOne president and chief executive officer. “Our customers and the greater Fargo and Moorhead area will benefit from the redundant, regional fiber network and expanded capabilities as these two companies join together. Like IdeaOne, HickoryTech is committed to providing local service and quality support to their customers.”