American telecommunications provider Cincinnati Bell is set to considerably increase its geographic reach by acquiring competitors Hawaiian Telcom and OnX Enterprise Solutions.

The former is an integrated communications provider serving the state of Hawaii, while the latter offers infrastructure, professional and managed services from facilities in the US, Canada and the UK.

Cincinnati Bell has agreed to pay approximately $650 million for Hawaii Telcom, and another $201 million for OnX – with the deals expected to close in 2017 and 2018 respectively.

“We are excited about the trajectory and growth prospects of our industry and our ability to capitalize on the rapidly changing dynamics in our markets. With Hawaiian Telcom and OnX, we have found great assets and partners on that same trajectory,” said Leigh Fox, president and CEO of Cincinnati Bell.

Cincinnati Bell headquarters
Cincinnati Bell headquarters – Champlin Architecture

For whom the bell tolls

Cincinnati Bell was established in 1873 as the City and Suburban Telegraph Association – three years before the invention of the telephone.

It ran the first telephone exchange in Ohio, and became one of just two telephone companies to provide services independently of AT&T.

Cincinnati Bell remains the dominant telephone and Internet service provider in Ohio, Indiana and Kentucky. In recent years, the company has expanded into fiber networking and enterprise IT services – it purchased data center provider CyrusOne in 2010 and spun it off in 2013.

Acquisitions outside of its geographic region will enable Cincinnati Bell to further develop its networking and IT services business.

Hawaiian Telcom is the incumbent local exchange carrier on the Pacific island, offering wired and wireless networking, managed and cloud services. It employs 1,300 staff, all of which are expected to keep their jobs following the acquisition. Both companies will also retain their names and separate brand identities.

OnX is an IT consultancy offering a broad spectrum of infrastructure services, with presence in more than 50 data centers across three countries. It was previously owned by Marlin Equity Partners, and is expected to be fully integrated into the Cincinnati Bell business.

“Cloud migration, the need for fiber infrastructure that supports 5G-ready, high-density data transmission and IoT are the key trends that will define telecommunications in the future,” Fox said.

“The implementation of our refined strategy, coupled with today’s combinations, will help build two distinct businesses with the appropriate scale, structure and leadership to deliver superior operating results, while providing strategic optionality from a diversified but complementary portfolio of assets.

“Today’s announcement positions us to capitalize on these favorable market dynamics while enhancing our leadership at the forefront of the telecommunications landscape. Together, Hawaiian Telcom and OnX bring Cincinnati Bell greater financial and operational scale and established market positions in new geographies.”