Time Warner Telecom has joined the consolidation party. Late Thursday, the company said it will acquire Xspedius Communications for $531.5 million and buy its way into 31 additional metropolitan markets in the process. TWT will pay $212.5 million in cash and $319 million in shares of Class A Common Stock.

This latest deal is one of several as competitive carriers who survived the telecom meltdown are now bulking up. To this point, Time Warner Telecom has been growing organically, extending the reach of its network and the breadth of its service offerings. Xspedius operates metro fiber networks in 43 markets in 18 states and Washington, D.C. offering integrated communications including metro Ethernet, local and long-distance voice, data and dedicated Internet access.

Competitive players including Integra Telecom, Level 3 Communications, TelePacific and XO Communications have all made major acquisitions recently, and most industry analysts expect that drive to continue as more of the organizations become financially healthy and have the money available to build scale for competition.

“This acquisition significantly broadens the already extensive nature of our local assets and national capabilities,” said Larissa Herda, Chairman, CEO and president of Time Warner Telecom, in a prepared statement. “The marketplace continues to validate our long-held view of the value of last-mile connectivity to enterprise customers. This strategic acquisition further expands our network reach and market density for serving multi-location and multi-city enterprise customers, increasing the number of markets we serve from 44 to 75, and enhances our ability to further fuel our enterprise growth.”

Xspedius is expected to generate $230 million to $250 million in revenue in 2007, including $40 million to $50 million in modified EBITDA and $20 million to $25 million in free cash flow before the cost of integration and the money saved through synergies is factored in, Time Warner Telecom CFO Mark Peters said in a statement. The two companies expect to achieve $40 million to $50 million in savings through synergies within 12 to 18 months of the merger closing, he added. Some of that will come by consolidating traffic on-net using existing local and regional networks.

The majority of Xspedius’ equity investors have already approved the merger, which needs regulatory approval as well.