Sunday, September 12, 2010

PAETEC to Acquire Cavalier/Intellifiber

PAETEC agreed to acquire Cavalier Telephone Corporation in an all-cash $460 million deal that will solidify the company's position as of the largest competitive local communication service providers in the United States.

Cavalier's wholly owned subsidiary, Intellifiber Networks, operates a fiber network spanning nearly 17,000 route miles. It offers scalable network solutions for service provider, enterprise, and government customers including private networks, low latency routing, SONET services, wavelengths, Ethernet, and data options.

Cavalier is a privately held company whose majority owner is M/C Venture Partners, a private equity firm based in Boston. Cavalier is based in Richmond, Virginia.

PAETEC serves over 84 of the top 100 Metropolitan Statistical Areas with an integrated product portfolio.

The combined company would have generated approximately $1.950 billion in revenue and $381 million in adjusted EBITDA for the twelve months ended June 30, 2010 on a pro forma basis, including $30 million in expected run-rate synergies in year two and annually thereafter.

After the closing of this transaction, PAETEC expects to have a local presence in 86 of the top 100 Metropolitan Statistical Areas (MSAs) and a presence in 1,178 collocations, or an increase in collocations of 95% as a result of the acquisition.

"This planned acquisition of Cavalier fits our strategic plan to add both fiber assets and regional density to better serve our customers and realize increased network synergies, both in the local loop and long haul," said Arunas A. Chesonis, chairman and chief executive officer of PAETEC. "Cavalier's fiber infrastructure, network assets and corporate culture make it a perfect match for PAETEC and dramatically strengthen the company in the Eastern United States."

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