Wheelings & Dealings: Otelco Acquires Reliable Networks

Wheelings & Dealings: Otelco Acquires Reliable Networks

By Ed Silverstein

Otelco has acquired Reliable Networks – a Maine-based provider of cloud hosting and managed services for organizations focused on mission-critical applications. The deal totaled $500,000 in cash and requires the future payment of stock.

Otelco is a wireline telecom services provider which operates in Alabama, Maine, Massachusetts, Missouri, New Hampshire, Vermont and West Virginia. Under the deal, the expanded Otelco will have carrier-grade service offerings to support critical Voice over Internet Protocol (VoIP), database, e-mail and vertical software applications, and will expand its market presence.

Otelco also will get more managed service capabilities to supplement current IP services. Under the deal, Reliable Networks will operate as a division of OTT Communications, Otelco's New England operating entity.

Over the next three years, Reliable Networks will pay the balance of the deal in stock – based on Reliable Networks’ financial achievements.

The deal makes sense based on the strengths of the individual companies. "Our business customers increasingly are turning to us to expand our hosting and managed services capabilities to be able to provide seamless, turnkey services anchored by our high-quality connectivity offerings," Mike Weaver, CEO of Otelco, said in a statement. "Over the years, we have successfully collaborated with Reliable Networks on larger, more complex VoIP telephone infrastructure deployments. Leveraging the networking and application hosting expertise of Reliable Networks by acquiring the company is a natural, evolutionary extension of our current product and services offerings to support the substantial growth of our Hosted IP Voice PBX (private branch exchange) Product."

"We have always focused on clients who demand superior quality and high levels of client service," Mark Stone, founder of Reliable Networks, explained in the statement. "As a high value-added provider, our 'measure twice, cut once' approach resonates with clients for whom downtime is expensive and disruptive. What could be better than to formalize a relationship with a company that also provides carrier-grade services complementing our own, and with whom we have successfully worked in the past?"

Otelco services include cable TV, digital high-speed data lines, local and long distance telephone service, network access, and transport services. It has about 96,000 voice and data access lines, and was ranked as among the top 25 largest local exchange carriers in the United States based on access lines. Otelco operates 11 telephone companies serving rural markets, too. It also provides retail and wholesale communications services via subsidiaries.

In addition, Reliable Networks is Maine’s only provider with a system on a chip (SOC) 2 Type II audit, which provides technology consulting, managed services and private/hybrid cloud hosting in the United States.

The deal follows similar recent acquisitions. During 2013, Vonage acquired Vocalocity, a VoIP provider, for $130 million, and Intermedia acquired, Telanetix, a cloud communications provider, according to a report from The Whir.




Edited by Cassandra Tucker
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