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October 4, 2010

EarthLink snaps up ITC Deltacom in $516m deal

To create IP infrastructure and offerings company by combining mutual business

By CBR Staff Writer

EarthLink (ELNK), an Internet service providers in US, has entered into a definitive merger agreement to acquire integrated communications services provider ITC DeltaCom (ITCD), for approximately $516m.

The purchase price represents a multiple of approximately 4.7x Adjusted EBITDA for the twelve months ended 30 June 2010, including expected cost synergies and excluding one-time transaction costs.

EarthLink said that this acquisition will enable it to create an IP infrastructure and offerings company by combining its existing ISP and IP-focused businesses with Deltacom’s integrated communications business.

Deltacom currently serves over 32,000 small and mid-size businesses, multi-location enterprises, government agencies and wholesale customers in the southeast with services including Multi-Protocol Label Switching (MPLS) and IP-based products.

EarthLink chairman and CEO Rolla Huff said, the capabilities they acquires with this acquisition will be complemented by their existing New Edge Networks business as they combine their nationwide MPLS network capabilities with Deltacom’s state-of-the-art infrastructure.

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