NEW ORLEANS-Aquis Communications Group Inc. is in the process of buying bankrupt paging carrier SourceOne Wireless Inc. of Chicago.
John Adiletta, Aquis president and CEO, said his company first entered into a management agreement with SourceOne in August, an arrangement under which Aquis handled all the day-to-day operations for the carrier.
Aquis then bid $7.3 million for the carrier. The Federal Communications Commission held a brief auction to solicit other bids for the carrier and its licenses. However, it didn’t receive any others, so Aquis’ bid was accepted.
The deal is still subject to the FCC’s final approval. Adiletta said he expects the FCC’s final decision soon and the deal could close before the end of the year.
Of the $7.3 million paid to SourceOne, $4 million is in cash and the remaining $3.3 million in redeemable preferred stock. The deal adds 175,000 subscribers to Aquis’ growing company, bringing its total to 625,000.
Adiletta said the main driver behind the acquisition was SourceOne’s location in the third-largest market in the country-Chicago-and its customers. Not considered an integral factor is SourceOne’s calling party pays paging platform, which allows customers to pay a one-time fee for service and then not have monthly bills because callers would pay to page the customers.
SourceOne declared bankruptcy in April. Analysts largely blamed the CPP marketing model for its failure, as few see a need for a CPP paging service since one-way paging is a commodity anyway.
“Any expansion of the CPP model or sales activities are on hold,” Adiletta said. “We are currently evaluating the strategic opportunities of CPP before making any decision to implement it further.”
This move continues Aquis’ acquisition mode and follows its purchases of Bell Atlantic Mobile’s paging business, Paging Partners and Francis Communications. The company also bought Internet service provider Sunstar Communications, virtual private network operator Intellispan and competitive local exchange carrier Comav. Adiletta characterized the acquisition as important, but said it still represents just the beginning steps of growing the company.
“We have a long way to go, but have achieved a significant critical mass,” he said, referring to the ability to offer existing customers a wide range of services. “We are still at the beginning. This is the end of our first year in business, and we are pretty happy with where we’ve gotten, but we still have a long way to go.”
