Tech Valley's TelJet deal expands its New England, Canada presence

Updated: Tech Valley Communications (TVC), a regional competitive fiber-based provider owned by Riverside Partners, on Tuesday reached an agreement to acquire Vermont-based TelJet's fiber and colocation assets.

When it completes this acquisition Tech Valley will have a network that will include over 190,000 fiber miles and almost 1,000 on-net buildings with presence in New York, Northern New England (New Hampshire, Maine and Vermont) and parts of Canada. TelJet's assets complement the network it built organically and the assets it purchased from segTEL in New Hampshire.

"We had this very dense fiber network in upstate New York and segTEL had this dense fiber network in New Hampshire, and what TelJet does is fills in that network in Vermont and actually connects the two networks together," said Kevin O'Connor, CEO and co-founder of Tech Valley Communications, in an interview with FierceTelecom. "This is an ideally suited acquisition target for us because it rounds out network in a number of key strategic ways from just the physical network as well as the customer base we can serve off of the combined network."  

Both service providers bring something to the table.

Set to become part of TVC, TelJet has built a growing base of wholesale and enterprise customers in Vermont, New Hampshire and Montreal.

Tech Valley can use TelJet's network in the Quebec market to fulfill requests from its existing clients that are looking to expand into Canada, while TelJet's existing Canadian clients will have another means to get to areas such as Massachusetts and upstate New York.  

"Greg Kelly, the founder and President of TelJet, has been pushing to get connectivity up into Canada and he built that connection last year, and he's doing a lot of cross-border work with a lot of Vermont companies that have business up there," O'Connor said.

O'Connor added that besides Vermont-based companies, "we have companies out of New York City that have an interest in Montreal and Canadian connection so I think it's a strategic piece of network to have."  

On the services side, O'Connor believes that TelJet's network will enable them to sell more wholesale services to other carriers, particularly wireless operators that are looking for alternative wireless backhaul sources.

"TelJet has done some nice preliminary work, which was not a space they were very deep in and now that we have hired Pat Coughlin, a veteran in the carrier wholesale sales and marketing arena, I think we're poised with the right network and right people selling it for us," O'Connor said. 

After completing customary closing conditions and getting necessary regulatory approvals, Tech Valley said it expects to complete the deal within the next 90 days.

TelJet may be TVA's latest acquisition, but it certainly won't be its last. It plans to augment its own organic growth with targeted acquisitions.

Although he could not name specific names of other providers, O'Connor said they are currently talking with other regional providers about striking a possible deal.

"There are companies that are openly up for sale and we're talking to a few of them," he said. 

This deal represents an ongoing trend taking place in the regional fiber provider space where private equity firms like Riverside are finding value in purchasing and infusing capital into these providers, while maintaining their independence.  

Over the past two years there has been rapid consolidation of the regional fiber player market, a trend that will likely continue as players look to grow through acquisition or be acquired by a larger company to up their profile.

Besides TVC, Berkshire Partners last December struck a deal acquire both Lightower Fiber Networks and Sidera Networks for $2 billion and merge them into an even larger competitive provider, for example.

Updated: We added quotes to the story from an interview we conducted Kevin O'Connor, CEO of TVC.

For more:
- see the release

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