US Signal to Acquire OneNeck, Expanding Nationwide Data Center Footprint, IT Infrastructure Network

Rhea-AI Summary

US Signal Company has signed an agreement to acquire OneNeck IT Solutions and OneNeck Data Center Holdings from Telephone and Data Systems (NYSE: TDS). The acquisition will increase US Signal's data centers from nine to 15, extending their footprint to the West Coast and tripling their commercial power under management. The deal is expected to close in Q3 2024, with no terms disclosed. OneNeck provides hybrid IT and multi-cloud solutions through data centers in six states and serves over 1,000 customers in various sectors. US Signal operates a 9,500-route mile fiber network and nine data centers in the Midwest. The acquisition is anticipated to enhance customer service and innovation while supporting growth in the U.S. middle market.

Positive

• Increases US Signal's data centers from nine to 15, quadrupling square footage.
• Extends US Signal's footprint to the West Coast with data centers in Phoenix, Denver, and Bend.
• Adds OneNeck's markets in Madison, Minneapolis, and Des Moines to US Signal's fiber network.
• More than triples commercial power under management for US Signal.
• US Signal and OneNeck share a strong culture of customer service and industry knowledge.
• Expected to enhance customer service excellence and technical capabilities.
• Potential for significant growth in the digital infrastructure sector, supporting expansion plans in the U.S. middle market.

Negative

• No financial terms of the acquisition were disclosed, adding uncertainty for investors.
• The transaction is subject to customary closing conditions, posing potential delays or complications.
• Integration risks associated with merging two companies' operations and cultures.
• Possible financial burden from acquiring and maintaining additional data centers and infrastructure.

Insights

Financial Analyst

US Signal's acquisition of OneNeck IT Solutions represents a significant strategic move in the digital infrastructure industry. By increasing the number of data centers from nine to 15 and expanding into new geographic markets, US Signal can substantially enhance its service offerings and customer reach. For investors, this means potential for increased revenue and market share. However, one concern is the lack of disclosed financial terms, which leaves some uncertainty regarding the acquisition's cost and its immediate financial impact.

Market Research Analyst

This acquisition strategically positions US Signal to capitalize on the rapidly growing demand for secure hybrid IT and multi-cloud solutions. OneNeck's established presence in sectors like healthcare, banking and government means US Signal can now cater to a broader and more diversified client base. Notably, expanding into the West Coast markets of Phoenix, Denver and Bend aligns well with industry trends that show increasing demand for data center services in these regions.

Tech Expert

From a technological standpoint, the integration of OneNeck's data centers and their expertise in hybrid IT solutions will enhance US Signal's technical capabilities. This move is poised to significantly improve their service reliability and scalability. Additionally, this expansion quadruples their data center square footage and more than triples commercial power under management, which are critical metrics for maintaining and attracting large enterprise clients.

GRAND RAPIDS, Mich., June 3, 2024 /PRNewswire/ -- US Signal Company, LLC (US Signal), a leading digital infrastructure provider and portfolio company of Igneo Infrastructure Partners, has entered into a definitive agreement to acquire OneNeck IT Solutions LLC and OneNeck Data Center Holdings LLC (OneNeck) from Telephone and Data Systems, Inc. (NYSE: TDS), a provider of wireless, broadband, video, voice, hosted and managed services to U.S. businesses. The firms expect the transaction to close in the third quarter of 2024 subject to customary closing conditions. No terms were disclosed.

Headquartered in Madison, Wisconsin, OneNeck provides secure hybrid IT and multi-cloud solutions through data centers in six Western and Midwestern states. Serving more than 1,000 customers across 45 states, OneNeck caters to sectors including banking, education, engineering, food and beverage, government, healthcare, manufacturing, and retail.

Headquartered in Grand Rapids, Michigan, US Signal provides data center, connectivity, cloud hosting, colocation, data protection, and disaster recovery services to regional enterprise customers and large national telecommunications carriers. It operates a 9,500-route mile fiber network and has nine data centers across Michigan, Illinois, Indiana and Wisconsin.

The acquisition will:

• Increase the number of US Signal data centers from nine to 15, quadrupling square footage
• Extend US Signal's footprint to the West Coast with the addition of Phoenix, Arizona; Denver, Colorado; and Bend, Oregon data centers
• Add OneNeck's Madison, Wisconsin; Minneapolis, Minnesota; and Des Moines, Iowa markets to US Signal's fiber network
• More than triple commercial power under management

"We were attracted to OneNeck for a host of reasons, with our shared culture of customer service excellence at the top of the list," said Daniel Watts, CEO of US Signal. "OneNeck is also a product innovator with deep knowledge of numerous industries. Together, we will provide our customers with greater scale and technical capabilities."

"US Signal is well known for putting its customers first and supporting their rapidly evolving needs," said Ted Wiessing, CEO of OneNeck. "OneNeck's customers will benefit greatly from our combined capabilities and US Signal's commitment to invest in growth."

"We see tremendous growth opportunities ahead for US Signal in the critical digital infrastructure sector. This acquisition is an important step toward fulfilling the company's expansion plans in the U.S. middle market," said Michael Ryder, US Signal board chair and co-head of Igneo in North America.

US Signal was advised by the law firm of Mayer Brown. Its financial advisor was DC Advisory. TDS was advised by TD Securities as its sole financial advisor.

About OneNeck

OneNeck IT Solutions LLC and OneNeck Data Center Holdings LLC, wholly owned subsidiaries of Telephone and Data Systems, Inc. (NYSE: TDS), specialize in multi-cloud solutions, managed services, professional IT services, hardware, and local connectivity via top-tier data centers in Arizona, Colorado, Iowa, Minnesota, Nebraska, Oregon and Wisconsin. For more information, visit oneneck.com.

About US Signal

US Signal, founded in 2001, is a leading digital infrastructure provider, offering connectivity, cloud hosting, colocation, data protection, and disaster recovery services powered by its wholly owned and operated robust fiber network. US Signal also helps customers optimize their IT resources through the provision of managed and professional services. For more information, visit www.ussignal.com.

About Igneo Infrastructure Partners

Igneo is an autonomous investment team in the First Sentier Investors Group. It invests in high-quality, mature, mid-market infrastructure companies in renewables, digital infrastructure, waste management, water utilities and transportation/logistics sectors in the UK, Europe, North America, Australia and New Zealand. Operating since 1994, the team works closely with portfolio companies to create long-term sustainable value through innovation, a focus on responsible investment and proactive asset management. As of Dec. 31, 2023, Igneo managed more than $19.5 billion in assets for 200 investors around the world. For more information, visit igneoip.com.  

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SOURCE US Signal Company, LLC

FAQ

What is the expected closing date for US Signal's acquisition of OneNeck?

The acquisition is expected to close in the third quarter of 2024, subject to customary closing conditions.

How will US Signal's acquisition of OneNeck impact its data center footprint?

The acquisition will increase the number of US Signal's data centers from nine to 15, extending its footprint to the West Coast.

What sectors does OneNeck IT Solutions serve?

OneNeck IT Solutions serves sectors including banking, education, engineering, food and beverage, government, healthcare, manufacturing, and retail.

How many customers does OneNeck IT Solutions serve?

OneNeck IT Solutions serves more than 1,000 customers across 45 states.

What are the key benefits of US Signal acquiring OneNeck?

The key benefits include increasing data center capacity, expanding market footprint, enhancing technical capabilities, and supporting growth in the digital infrastructure sector.

Where are US Signal's new data centers located after acquiring OneNeck?

The new data centers will be located in Phoenix, Denver, Bend, Madison, Minneapolis, and Des Moines.