Talk America, a Reston-based phone and Internet provider, has been acquired by Richmond-based Cavalier Telephone & TV for $251 million. The merger will grow Cavalier’s customer base and put the company in six of the top 20 U.S. markets.
Ed Meyercord, Talk America CEO, was named CEO of Cavalier. Cavalier’s current CEO, Brad Evans, will become executive chairman.
Talk America was founded in 1989 as a long-distance provider for residential and small-business customers.
The company built out its own long-distance network in 1997 and today offers both long-distance and local service, as well as Internet access, to customers in Michigan, Ohio and throughout the Southeast. Last year, publicly traded Talk America pulled in $463 million in revenue.
Privately held Cavalier offered $8.10 per share for Talk America, a 23 percent premium over the company’s closing price last Thursday. The deal is expected to be finalized by December.
Cavalier’s existing high-speed network reaches more than 215,000 residential customers throughout the Mid-Atlantic, including local customers in the Washington region. The merger will extend Cavalier’s reach beyond the East Coast.
“We believe that this acquisition combines the strength of two of the nation’s most robust competitive carriers,” said Evans. “Cavalier’s networking capability can now be leveraged with Talk’s core Michigan, Ohio and southeastern markets.”
The merger comes as local phone competition is heating up between big-name phone and Internet providers, such as Comcast and Verizon. High-profile companies have been racing to build out their high-speed connections and offer “bundles” of phone, Internet and television for one fee.
