Wednesday, June 9, 2010

Speakeasy to Merge with MegaPath + Covad

Speakeasy, which is owned by Best Buy, will combine its business with Covad Communications and MegaPath. The deal will merge Speakeasy' small business voice and data services with MegaPath's value-added services for distributed enterprises, and make them available over Covad's nationwide broadband network.

The combination of Speakeasy+MegaPath+Covad will create a "managed services local exchange carrier" (MSLEC) able to provide a full range of IP voice, security, VPN and Internet services nationwide.

The transaction is expected to close in the third quarter of 2010, contingent upon closing of the previously announced transaction between MegaPath and Covad. Financial terms were not be disclosed.

Best Buy acquired Speakeasy in 2007 and will continue to be a minority investor going forward.

Once the mergers close, the integrated company will serve the market through two divisions: a wholesale operating division and a direct, commercial division. Craig Young, current CEO of MegaPath, will become executive chairman of the combined businesses; reporting to Craig will be Pat Bennett who will continue as CEO of Covad Communications, and Bruce Chatterley, current CEO of Speakeasy, who will be president of the commercial unit in charge of all non-wholesale customer sales and marketing division.

"The combination of Covad, MegaPath and Speakeasy will create the next-generation CLEC - an MSLEC that can offer customers and partners a full suite of managed IP broadband services and access over a powerful national network," said D. Craig Young, MegaPath CEO. "With the additional resources, mature channels and enhancements to the service portfolio, we expect the combined companies to extend their leadership position in the SMB, enterprise and wholesale markets."


  • In March 2010, Covad and MegaPath announced plans to merge into a single company. Pending federal and state regulatory approvals, the transaction will create one of the largest managed service local exchange carriers (MSLEC) in the U.S. Financial terms were not disclosed. Covad provides a wide range of access and hub aggregation services, including Ethernet, DSL, and T1. It operates a nationwide IP/MPLS network and its network footprint encompasses some 4,400 central offices (COs) in 45 states and 240 metropolitan statistical areas. Covad wholesale partners include leading providers such as AT&T, Verizon Business, and Sprint. The company is based in San Jose, California. MegaPath provides managed IP communications services across North America. It also operates a nation-wide MPLS backbone with POPs in 30 major cities MegaPath is based in Costa Mesa, California.

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