RCN acquires NEON Communications

By Lisa Kerner

Charlotte, N.C., Nov. 13 - RCN Corp. completed its $5.15-per-share acquisition of NEON Communications Group, Inc.

The total consideration of some $255 million was funded through a combination of proceeds from an additional $200 million term loan under RCN's existing senior secured credit facility, a draw of approximately $25 million under the company's existing $75 million line of credit and cash on hand.

NEON shareholders approved the June 25 merger agreement at a special meeting on Nov. 6.

NEON will be combined with RCN's business solutions unit, and the combined unit will become RCN Metro Optical Networks.

"NEON adds a strategic scaling opportunity in our RCN footprint," RCN president and chief executive officer Peter Aquino stated in a company news release.

"NEON's networks, facilities, service offerings and geographic distribution fit hand in glove with RCN, instantaneously expanding RCN Metro's reach and establishing us as one of the most advanced, fiber-rich alternatives to incumbents in the metro markets we serve," Aquino added.

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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