RCN Corp. is building its commercial business with the acquisition of wholesale communications provider NEON Communications Group.
In the deal, which will close in the fourth quarter, RCN will pay $5.25 per share or approximately $260 milllion It is funding the purchase with $250 million in senior secured term loans and unsecured debt as well as cash.
RCN, which provides cable, phone and data services, will expand its presence in the twelve-state Northeast and Mid-Atlantic region with the addition of NEON’s fiber optic network. The company said the acquisition will nearly double its Business Solutions revenue in the Northeast and Chicago markets.
“This is a significant strategic acquisition for RCN that scales our high-value commercial segment with another premier regional service provider in our own footprint,” says RCN President and CEO Peter Aquino, “This combination of NEON, ConEd Communications and RCN's existing metro and intercity rings will now reach into both Tier 1 and Tier 2 markets for enterprise and carrier customers who are looking for robust alternatives to incumbent providers.”
In 2006, RCN bought Con Ed Communications for $32 million, expanding its network in New York, New Jersey, and Connecticut.