NEON, RCN merger closer to completion

By Lisa Kerner

Charlotte, N.C., Nov. 8 - The acquisition of NEON Communications Group, Inc. by RCN Corp. is expected to close in mid-November, it was announced on Thursday.

RCN has received Federal Communication Commission approval and "substantially all" state public utility commission approvals required for the transaction, according to a company news release.

NEON shareholders approved the deal, valued at about $260 million, at a special meeting on Nov. 6. Under the June 25 merger agreement, NEON shareholders will receive $5.25 per share.

RCN said it expects to fund this transaction with proceeds from an additional $200 million term loan under its existing senior secured credit facility, a draw of approximately $25 million under its existing $75 million line of credit and cash on hand.

New York-based NEON provides high-bandwidth fiber optic capacity and end-to-end telecom services to communications companies and enterprise customers in the 12-state Northeast and mid-Atlantic region.

RCN, located in Herndon, Va., provides bundled cable, high-speed internet and phone services over its fiber-optic local network to residential customers.

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