Sidera is merging with Lightower - to compete more effectively with the RBOCs, according to IBT.
The merger is being done by Berkshire Partners, a VC firm with no connection to Bershire Hathaway. It is a $2.2B deal. Both Lightower and Sidera are owned by VC's.
Lightower CEO Rob Shanahan will run the combined company, which will have network throughout the Northeast, Mid-Atlantic and Midwest, and provide access to more than 6,000 on-net locations, according to the BizJournal.
"ABRY Partners, which has owned Sidera for several years now, and Pamlico Capital, which is one of Lightower's major owners, will remain as investors in the combined company alongside Berkshire," reports Rob Powell. Powell reminds me that ARBY and Berkshire own TELx together.
This is a roll-up of roll-ups as Lightower consists of KeySpan, DataNet, Lexent, Veroxity, Open Access and NStar; while Sidera is mainly RCN coupled with ConEd, Neon, and Long Island Fiber Exchange.
This gives them a big footprint - and 6000 lit buildings is nothing to sneeze at - but $2B and you think you will compete with the RBOC's????
One problem with these mergers -- no one knows where the assets (fiber runs) are - which makes it very challenging to make this a profitable transaction. Plus when have these mergers ever worked out -- for anyone but the bankers? Bigger isn't better. Better is better.