Qwest Buys OnFiber for $107M
May 15th, 2006 By: Rich Miller
The bandwidth consolidation continues. Om Malik notes that Qwest has acquired OnFiber for $107 million in stock. Om also notes that the company has obtained at least $146 million in venture funding over the years. At various times, OnFiber has been backed by leading firms such as Kleiner Perkins Caufield & Byers, Incepta, Bear Stearns Merchant Banking, Telesoft Partners, Amerindo Investment Advisors, and GE Capital.
Back in 2002, OnFiber was itself an acquirer, acquiring Sphere Networks and Telseon as it built optical Ethernet networks in major metro markets. In 2004 it acquired the skeleton of Enron’s broadband operation.
“We expect the Ethernet market will grow upwards of 50 percent annually; Ethernet has been a high growth product for us in-region, and this increases our participation nationally,” said Tom Richards, Qwest executive vice president, business markets group. “For Qwest, this expands our penetration in key markets throughout the country while reducing last-mile costs. It absolutely fits our criteria for a return-focused acquisition.”