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RCN to acquire Neon Communications

Mon, 06/25/2007 - 8:30am
Traci Patterson

RCN Corp. will acquire Neon Communications Group Inc. for up to $5.25 per share of NGI common stock, in cash, for an expected total of up to $260 million.

Neon provides network transport services to carrier and enterprise customers in the 12-state New England and mid-Atlantic regions, which fits in nicely with RCN’s Northeast, mid-Atlantic and Chicago markets. Also, Neon’s complementary network comes with a customer base that is in line with RCN’s Business Solutions’ growth strategy, the company said.

Neon’s fiber optic network extends approximately 4,800 route miles and contains more than 200 points of presence from Maine to Virginia. The telecom services provider has approximately 120 carrier and enterprise customers.

RCN expects to fund the purchase with $250 million of debt financing. Both companies’ boards have approved the transaction, and it is expected to close during Q4. The deal is subject to regulatory approvals and the approval of Neon's stockholders, as well as other closing conditions.

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