McLeodUSA Inc. (Nasdaq: MCLD), the hard-living CLEC, announced yesterday that it had completed a $17.3 million acquisition of the customer base and network assets of Chicago-based Mpower Communications .

With the acquisition, McLeod will get about 5,000 Chicago-area customers, although it is not immediately clear what types of network assets it will get. McLeod reps declined to divulge specifics, citing a self-imposed quiet period prior to its S-1 filing with the SEC.

When will the IPO happen? "We're hoping it'll be sooner rather than later," a McLeod spokesman says.

To see McLeod making acquisitions is no surprise. The company has a history of buying companies, but has never been able to keep itself financially sound enough to turn those assets into an industry powerhouse.

In its lifetime, McLeod has been bankrupt twice and has had its stock delisted from the Nasdaq once. It first went public in 1996, went bankrupt in 2001, came back in 2002, and filed for Chapter 11 bankruptcy a second time in 2005. (See McLeod Emerges From Chap. 11, McLeodUSA Faces Nasdaq Delisting, and Black Cloud Hangs Over McLeod.)

When McLeod emerged from bankruptcy a second time, ownership of the company was turned over to the bondholders, so it ceased to be a publicly traded entity. But now the company is heading for the public markets once more. And its multimillion-dollar acquisition of Mpower's stuff could be seen as a way to demonstrate growth in a market dominated by bigger, richer phone companies.

Behind the scenes is Royce Holland, who became McLeod's CEO in January 2006. Holland was the founder and CEO of Allegiance Telecom and one of the founders of MFS Communications. Allegiance was bought by XO Communications Inc. in 2004, and MFS was acquired by WorldCom in late 1996. He's also on the board of Masergy Communications Inc. and MetaSolv Software Inc. (Nasdaq: MSLV).

— Raymond McConville, Reporter, Light Reading