Acquisition expands InfoStructure network

Talent-based telecom InfoStructure has acquired Rio Networks of Roseburg from the Cow Creek Band of Umpqua Tribe of Indians.

The deal, which closed at midnight, triples the size of the firm providing Internet and telephone services to a largely business clientele.

Terms of the acquisition were not disclosed.

No single compelling factor led to the deal, said Jeff Rhoden, one of InfoStructure's three primary owners.

"There were definitely a number of big ones that make it a very worthwhile deal for us," Rhoden said. "The fact we have so many customers on other networks that (now) will migrate onto our own network is a big deal to us. We've been contracting with Rio, CenturyLink and Integra, so it will be nice to have a much larger private network rather than relying on other carriers' networks."

InfoStructure previously had 2,000 customers, using 9,000 service lines, while Rio had 4,000 customers and 21,000 service lines. Now, with 6,000 customers and 30,000 service lines and a combined staff of 23, InfoStructure becomes a bigger regional player.

"Hopefully this will start a trend for future growth," Rhoden said. "In telecom, there's no faster way to grow than through acquisitions, and that's the path we most likely will continue to take."

Although the tribe is selling off its telecom operations, it will retain a recently completed data-storage and management center. "As growth occurs, you start to look at things that are maybe holding you back, because you can't do it all," said John McCafferty, business operations officer for the Umpqua Indian Development Corp.

Rio was formed in Eugene and later moved to Bend before the Cow Creek tribe bought the company in 1998 and shifted the headquarters to Roseburg. It provides services to customers up and down the Interstate 5 corridor, as well as in Central Oregon.

"They've done a nice job of building out their network," Rhoden said. "Our business is more spread out geographically than Rio, but we don't have as big a network build-out."

Rhoden and Scott Hansen worked for Rio for five years before joining forces with Chad Cota to acquire InfoStructure in 2003.

Last fall, InfoStructure got wind the tribe might sell Rio and quickly made its interest known. "We began conversations last September," Rhoden said. "It's taken that long to evaluate their network, their personnel, how they do business, and how that lines up with what we do, our goal and our vision."

Reach reporter Greg Stiles at 541-776-4463 or Follow him on Twitter @GregMTBusiness.

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