OnFiber swallows Telseon

The urge to consolidate is certainly alive and well in Austin, Texas. On Tuesday, Austin-based service provider OnFiber Communications revealed it has acquired the troubled metro services provider Telseon.

OnFiber puts around $85 million on the worth of the acquisition although it paid about 5 to 20 cents on the dollar for the company and its assets, according to Michael Rees, vice president of marketing at OnFiber. OnFiber purchased the company with cash, common stock and the assumption of debt. Essentially, OnFiber acted in a debtor in possession role without the bankruptcy for Telseon.

OnFiber and Telseon had been in discussions sometime ago when Telseon was in better financial standing, but those negotiations failed. The discussions heated up once again in early June between OnFiber’s CEO Danny Bottoms and Telseon’s CEO John Kane. And although Rees said Kane was instrumental in the sale, he will not be joining the combined company.

The acquisition is supposed to boost OnFiber’s customer contract value by 40% to $39 million and gives the provider the additional metro areas of Denver and Miami. And of Telseon’s roughly 100 customers, 90 will be new to OnFiber.

OnFiber recently acquired the assets of Sphera Optical Networks for $2.3 million. And the company is still looking for more assets to attain.