Birch Telecom Inc. and Ionex Telecom Inc. today announced the close of their merger, creating one of the largest competitive telephone providers in the southern and central United States.
The combined company has about 190,000 customers, mostly businesses, over approximately 500,000 telephone lines that are heavily concentrated in Texas, Oklahoma, Missouri and Kansas.
Birch and Ionex combined generated about $350 million in revenue last year, according to spokesman Trent Freeman.
Freeman says the privately held company is fully funded, expects to generate positive EBITDA within a year and be among the first competitive providers to generate positive free cash flow. The company, which owes $100 million in debt, has disclosed no timeframe for reaching that milestone.
In support of the merged company, an investment group led by major backers of Ionex will provide Birch more than $40 million in equity funding.
The combined company, based in Kansas City, Mo., has 1,800 employees on the payroll, but that number could dwindle. Its CEO is former Birch chief executive Dave Scott.
“We are still making decisions on consolidating both of the companies as far as the number of employees are concerned,” says Freeman.
Targeting small to mid-size businesses, Birch offers local and long-distance telephone service across more than 40 metropolitan markets in 10 states: Alabama, Georgia, Kansas, Mississippi, Missouri, North Carolina, Oklahoma, South Carolina, Tennessee and Texas. Birch, which emerged from bankruptcy last fall, also operates a high-speed data network, delivering Internet access to businesses in Kansas, Missouri, Oklahoma and Texas. Birch also has residential customers, though they represent about five percent of its total business, says Freeman.
Ionex provides voice and data services to small and medium-sized businesses in Texas, Oklahoma, Kansas and Missouri. Ionex offers local and long-distance phone service, broadband access and a suite of value-added products, including e-mail, voicemail, conferencing and electronic billing through the Ionex ATM network.
