EarthLink completes acquisition of STS Telecom

EarthLink, Inc., a leading IP infrastructure and services company, today announced that it has completed the acquisition of STS Telecom, a privately-held business providing voice, data and internet services to small to medium-sized business customers in Florida and Georgia.

For 2011 EarthLink expects STS Telecom to contribute approximately $15 to $18 million to EarthLink revenues and for the transaction to be accretive on a free cash flow basis.  EarthLink will integrate STS Telecom into its newly established “EarthLink Business” division.

“We are very impressed with the experience level and processes STS Telecom built to sell and support a hosted VoIP platform,” stated Rolla P. Huff, EarthLink’s Chairman and Chief Executive Officer. “We will leverage this platform and the talented people at STS to launch a nationwide hosted VoIP product for EarthLink Business over our ubiquitous IP network. In addition, STS Telecom’s customer base overlaps with our fiber network in South Florida so this acquisition is an opportunity to layer a growing and profitable revenue stream onto the EarthLink Business southeast fiber network.”

Mark Amarant, Chief Executive Officer of STS Telecom, added, “STS has successfully provided a Hosted PBX solution to small and medium-sized businesses on our proprietary platform since 2005. I am pleased that EarthLink will be able to scale our capability of offering a complete hosted voice and data solution to businesses with solid average revenue per customer (ARPU) to a national level. The completion of this transaction is an extremely positive next step for our company, our employees and our customers.”