Latest OnFiber Communications News
Jul 6, 2018
May 15, 2006 07:05 AM Eastern Daylight Time DENVER--( BUSINESS WIRE )--May 15, 2006--Qwest Communications International Inc. (NYSE: Q) announced today that it will acquire privately held OnFiber Communications, Inc., an Austin-based provider of custom-built and managed metropolitan Ethernet and wide-area network solutions. The agreement calls for a $107 million purchase price with Qwest having the option up until closing to substitute up to $35 million of Qwest shares for cash. The transaction is anticipated to close in the third quarter. OnFiber specializes in high-bandwidth, all-fiber solutions serving primarily large business and government clients. The company operates an all-optical network in 23 metropolitan areas and features a full offering of access and transport services, including Ethernet, SONET and Wavelength. Qwest currently provides similar solutions to metropolitan areas within its 14-state operating region, and this acquisition deepens Qwest's already significant out-of-region metropolitan coverage while meaningfully reducing third-party access costs. Qwest's nationwide MPLS backbone network extends throughout the United States and carries nearly 4 billion voice-over-Internet Protocol minutes per month. "This is a sound, complementary deal for Qwest, OnFiber and both companies' customers," said Tom Richards, Qwest executive vice president, business markets group. "This union gives businesses choice in national providers. OnFiber brings a unique approach to delivering and managing custom fiber networks that has proven to be efficient and cost-effective." OnFiber expects to post revenues of nearly $60 million in 2006(a) -- representing year-over-year growth of more than 20 percent. Last year, the company's average revenue-per-employee reached nearly $450,000 and its average monthly customer revenue at more than $17,000, was among the highest of competitive telecom providers. OnFiber serves leading companies in industry verticals, such as media and entertainment, financial services, software and healthcare. "We expect the Ethernet market will grow upwards of 50 percent annually; Ethernet has been a high growth product for us in-region, and this increases our participation nationally," said Richards. "For Qwest, this expands our penetration in key markets throughout the country while reducing last-mile costs. It absolutely fits our criteria for a return-focused acquisition." 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. "The overwhelmingly positive customer response we've earned from our unique approach, which is to design, build and manage purpose-built network solutions, proves our model is effective," said Danny Bottoms, OnFiber's president and CEO. "By joining Qwest, we'll be able to advance the OnFiber vision while offering customers more product depth. OnFiber's national presence increases Qwest's access density in metro areas outside of its region." (a) 2006 cost of revenues is estimated at $32 million and 2006 selling, general and administrative expenses are estimated at $13 million. About OnFiber Communications, Inc. OnFiber provides high-performance fiber networks for the world's most respected companies. Fortune 1000 corporations, global telecom giants and the Internet organizations that define the Web all rely on OnFiber's infrastructure. The company's unique process, AdaptiveBuild(R), produces individually designed, built and managed metropolitan and wide-area solutions. Because OnFiber's networks are created for specific application and service needs, enterprises and telecommunications providers benefit from security, reliability and performance that is purpose-built. OnFiber owns networks in major cities throughout the US and offers a full suite of transport technologies including Wavelength, Ethernet and SONET. For more information please visit www.onfiber.com or call 1-866-ONFIBER. About Qwest Qwest Communications International Inc. (NYSE: Q), through its operating subsidiaries, is a leading provider of high-speed Internet, data, video and voice services. With nearly 40,000 employees, Qwest is committed to the "Spirit of Service" and providing world-class services that exceed customers' expectations for quality, value and reliability. For more information, please visit the Qwest Web site at www.qwest.com . Forward Looking Statement Note This release may contain projections and other forward-looking statements that involve risks and uncertainties. These statements may differ materially from actual future events or results. Readers are referred to the documents filed by us with the Securities and Exchange Commission, specifically the most recent reports which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements, including but not limited to: access line losses due to increased competition, including from technology substitution of our access lines with wireless and cable alternatives, among others; our substantial indebtedness, and our inability to complete any efforts to de-lever our balance sheet through asset sales or other transactions; any adverse outcome of the current investigation by the U.S. Attorney's office in Denver into certain matters relating to us; adverse results of increased review and scrutiny by regulatory authorities, media and others (including any internal analyses) of financial reporting issues and practices or otherwise; rapid and significant changes in technology and markets; any adverse developments in commercial disputes or legal proceedings, including any adverse outcome of current or future legal proceedings related to matters that are or were the subject of governmental investigations, and, to the extent not covered by insurance, if any, our inability to satisfy any resulting obligations from funds available to us, if any; potential fluctuations in quarterly results; volatility of our stock price; intense competition in the markets in which we compete including the likelihood of certain of our competitors consolidating with other providers; changes in demand for our products and services; acceleration of the deployment of advanced new services, such as broadband data, wireless and video services, which could require substantial expenditure of financial and other resources in excess of contemplated levels; higher than anticipated employee levels, capital expenditures and operating expenses; adverse changes in the regulatory or legislative environment affecting our business; changes in the outcome of future events from the assumed outcome included in our significant accounting policies; and our ability to utilize net operating losses in projected amounts. The information contained in this release is a statement of Qwest's present intention, belief or expectation and is based upon, among other things, the existing regulatory environment, industry conditions, market conditions and prices, the economy in general and Qwest's assumptions. Qwest may change its intention, belief or expectation, at any time and without notice, based upon any changes in such factors, in Qwest's assumptions or otherwise. The cautionary statements contained or referred to in this release should be considered in connection with any subsequent written or oral forward-looking statements that Qwest or persons acting on its behalf may issue. This release may include analysts' estimates and other information prepared by third parties for which Qwest assumes no responsibility. Qwest undertakes no obligation to review or confirm analysts' expectations or estimates or to release publicly any revisions to any forward-looking statements and other statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. By including any information in this release, Qwest does not necessarily acknowledge that disclosure of such information is required by applicable law or that the information is material. The Qwest logo is a registered trademark of Qwest Communications International Inc. in the U.S. and certain other countries.