Lightyear acquires SouthEast Telephone

The consolidation trend in the competitive carrier market continues, with Lightyear Network Solutions announcing today that it had acquired the business assets of Pikeville, Kentucky-based SouthEast Telephone Inc. in a transaction valued at approximately $7.2 million. The announcement comes just a few days after Earthlink announced plans to acquire ITC Deltacom and a few weeks after Paetec said it would buy Cavalier.

Lightyear CEO J. Sherman Henderson told Connected Planet he saw consolidation in the competitive carrier market coming about year ago because of a need for economies of scale. “You have to be larger than you are today,” he said. “You have to be better positioned to capitalize on products and customers.”

Lightyear’s first move toward consolidation was a reverse merger with publicly held Libra Corp. With the SouthEast acquisition, Lightyear now will have revenues of between $76 and $77 million, which will enhance its ability to acquire companies with revenues in the $30 to $50 million range, Henderson said.
The company’s focus will remain on serving business customers in smaller markets such as those served by SouthEast Telephone.

SouthEast Telephone is a profitable company that has focused primarily on the residential market. Henderson said Lightyear sees an opportunity to grow the business by targeting business customers. “There’s a big opportunity for us to go in and call on hospitals, car dealerships, county seats, banks, grocery stories, and doctors’ offices,” he said.

Lightyear’s plans also include upgrading the networks it acquires. “Our opportunity is to bring new products they don’t have,” Henderson said.

Henderson said his acquisition criteria were that the company has to be profitable and has to either be involved with future-looking products, such as hosted IP, or needs to have a base of customers that can be enhanced with Lightyear’s products.