Combination creates the second largest competitive communications provider in the U.S.
Waltham, MA and Rochester, NY – March 28, 2006 – CTC Communications and Choice One Communications, which on February 10, 2006 announced their agreement to merge, today announced they are jointly acquiring Conversent Communications, Inc., an integrated communications provider with significant facilities and customers in the Northeast as well as in West Virginia. On a combined basis, the three companies currently generate about $800 million in annual revenue and provide telecommunications services to over 150,000 business customers representing more than 1.3 million access lines equivalents. The combined company, which will be privately held, will be the second largest competitive communications provider in the U.S., with a heavy regional focus in the Northeast, Mid-Atlantic, and upper Midwest regions. Its network will include 10,000 route miles of fiber and approximately 700 unique collocations.
The acquisition will be partially funded with an equity investment from Columbia Ventures Corporation (the sole shareholder of CTC Communications) and a corresponding equity investment from existing Choice One shareholders or their affiliates. Camulos Capital LP and Värde Investment Partners LP have agreed to backstop the equity investment from the existing Choice One shareholders. Additionally, Goldman Sachs Credit Partners LP has committed to a fully underwritten senior secured credit facility to fund the balance of the acquisition and to refinance existing debt.
“These three companies represent a powerful combination” said Kenneth D. Peterson, Jr., Chairman of CTC and CEO of Columbia Ventures. “We are bringing together a rich mix of dense network facilities, leading products, aggressive sales organizations and world-class employees to create a preeminent telecommunications company. We will have both the scale and the resources to compete effectively with the dominant incumbent phone companies in our markets.”
"Like Ken Peterson, the Choice One shareholders are committed to creating value by offering small and mid-sized business customers an attractively priced, high-value portfolio of products that will be competitively successful in this dynamic market," said Tom Casey, Chairman and CEO of Choice One. "Consolidation to enable increased efficiency has been a part of the strategy from the beginning. Conversent is a well-run, well-managed, growing business, and we welcome the Conversent team to join with us in realizing the benefits of one of the most exciting combinations ever to occur in the competitive telecommunications industry. We intend to learn from each other and adopt the best practices from each of the three businesses. In doing so together, we have the opportunity to create a telecommunications service provider that leads our industry."
”Business customers tell us that they want a clear, differentiated and sustainable alternative to the big phone companies,” said Ray Allieri, president and chief executive officer of CTC. “Adding Conversent to our already announced combination of Choice One and CTC creates an even stronger competitor to the Incumbent Local Exchange Carriers like Verizon and AT&T. The scale of our new company will give us the ability to further invest in our high touch customer service and next generation network and allow us to expand our feature rich service offerings, particularly in the area of Voice over IP.”
“We founded Conversent to provide small and mid-sized businesses with innovative, integrated communications solutions that are backed by an uncompromising commitment to customer service," said Robert Shanahan, president and CEO of Conversent Communications. "In the last eight years, Conversent's staff has dedicated themselves to this vision and made our company one of the fastest growing and successful CLECs in the nation. The added network capabilities, expanded reach and innovative service offerings that this new combination brings together will benefit both customers and the industry in general. We look forward to teaming with our new partners to establish this new company."
“The resources provided by this industry-leading consolidation will facilitate the continued growth and expansion of FiberNet’s unique product and service mix,” said Jack Pottle, CEO of FiberNet, Conversent’s West Virginia business. “We are particularly excited about interconnecting FiberNet facilities with those of CTC and Choice One in Pennsylvania, Maryland and Ohio, expanding our ability to serve multistate business customers.”
Conversent has headquarters in Charleston, WV and Marlborough, MA; CTC is headquartered in Waltham, MA; and Choice One is headquartered in Rochester, NY. After the merger, the combined company will continue to maintain a major presence in Boston, Rochester and Charleston.
The acquisition is subject to customary closing conditions, including regulatory approvals. Closing is expected to take place in 90 to 120 days. The name of the combined company has not yet been determined.
The Choice One Board was advised by The Blackstone Group L.P.’s Corporate Advisory Services team and Akin Gump Strauss Hauer & Feld LLP. The CTC Board was advised by Columbia Ventures Corporation and Kelley Drye & Warren LLP. Conversent was advised by Miller Buckfire & Co., LLC and Edwards Angell Palmer & Dodge LLP.
About Choice One Communications
Choice One Communications is a leading provider of voice and data services, including local and long distance phone service, high-speed Internet, T1 access, and web hosting, design and development services in the Northeast and Midwest. The company’s expansive network footprint, including 490 collocation facilities, reduces its dependency on local exchange carriers, enabling it to be highly responsive to clients needs. Visit Choice One Communications online at www.choiceonecom.com.
About CTC Communications
CTC Communications is a leading integrated communications carrier providing business customers from Maine to Maryland with a full range of converged voice, data and Internet services, dynamically allocated on a next-generation, all-IP packet-based network. The company serves small, medium and larger business customers. CTC’s Cisco-powered IP+ATM packet network runs over a fully managed and CTC-owned fiber optic network. CTC has provided cost-effective communication solutions since 1981 and is today part of Columbia Ventures Corporation’s worldwide family of businesses. In 2005, CTC acquired Lightship Telecom and Connecticut Broadband. Visit CTC Communications online at www.ctcnet.com.
About Conversent Communications, Inc.
Conversent Communications, Inc. (CCI) was formed through the April 2005 merger of its subsidiaries, Conversent Holdings, Inc. (CHI) and FiberNet (FN), headquartered in Marlborough, MA and Charleston, WV, respectively. CHI was cofounded by cable entrepreneur Robert Fanch and Robert Shanahan in 1998. FN was founded in 1997 by Fanch and other investors. CCI serves clients from West Virginia to Maine with innovative and flexible communication solutions backed by a reliable network and a dedicated customer support staff. CCI has been recognized by small, mid-sized, and enterprise business customers as a preferred provider for all their communication needs. More information is available at www.conversent.com and www.wvfibernet.net.