Long in the ISP business through its wholesale TrueBand offer and its satellite broadband offer WildBlue/Exede, NRTC will add significant assets to those efforts with its announced acquisition of Raleigh, NC based NeoNova Networks. NRTC is buying 100% of NeoNova, which will remain headquartered in Raleigh. The transaction closed this morning and terms were not disclosed.
NeoNova’s core business is in providing wholesale ISP services and as of April 2013, they counted 130 ISP customers with 500K subscribers. They recently expanded their focus through a reseller agreement with Google for Google Apps. Offered as both a wholesale option for its ISP customers and as a cloud based solution targeting the SMB sector directly, NeoNova’s new cloud focus was certainly attractive to NRTC. They recently added their 12,000th SMB cloud customer.
The NeoNova acquisition follows a familiar playbook for Herndon, Va.- based cooperative NRTC. Buy companies they feel offer strategic value for both their owners and members, which consist primarily of rural electric and telephone cooperatives and companies. Similar past acquisitions and/or investments have included Telispire, Digital Bridge Communications, and WildBlue.
“We’ve looked at combining with [NeoNova] twice in the past,” NRTC CFO Terry Gilmore told me in a phone interview today. That prompted me to ask why the third time made sense? “Well everyone said yes this time,” he responded.
From NeoNova’s perspective, the timing was right for this acquisition. “This is a scale business. We always had plans to grow. For our customers to be successful, we have to grow. This is a good step in that direction,” said NeoNova CEO Ray Carey in a separate phone interview.
NeoNova will take over management of both NRTC and NeoNova ISP operations, although NRTC’s TrueBand ISP services will remain intact, at least for the time being. “We’ll make the full range of our products and services available to all members, but the end customer is running the show,” said Carey when I asked him how the two companies product portfolios will be integrated for NeoNova and NRTC’s ISP customers.
NRTC sees great potential with their electric cooperative members with NeoNova’s product line and expertise.” We see great untapped opportunity with our electric utility members,” Chris Martin, NRTC Vice President, Member and Industry Relations tells me. “A lot of things that NeoNova is doing with cloud will be attractive to them, not only for the ISP stuff, but also smartgrid and connected home applications. We expect to see a bigger presence of NeoNova in the electric utility market.”