Telecom carrier Paetec buying privately held rival Cavalier for $460M in cashBy AP
Monday, September 13, 2010
Paetec buying rival telecom Cavalier for $460M
FAIRPORT, N.Y. — Paetec Holding Corp., which provides voice and data services to businesses, said Monday it will buy rival Cavalier Telephone Corp. for $460 million in cash.
The move will expand the reach of Fairport, N.Y.-based Paetec’s network by adding 17,000 miles of optical fiber, it said. Cavalier is privately held, with its largest owner being Boston private equity firm M/C Venture Partners.
FBR Capital Markets analyst David Dixon said the deal represents an “opportunistic acquisition” of a competitor that was under financial pressure, unlike Paetec, which stabilized its revenue in the previous quarter.
Paetec shares rose 25 cents, or 6 percent, to $4.40 in morning trading.
Cavalier, which is based in Richmond, Va., provides business services in 15 Eastern states and Washington D.C. It provides residential service in Baltimore, Philadelphia, Pittsburgh, Detroit and a few other cities.
Taken together, Paetec and Cavalier generated revenue of about $1.95 billion over the year ended June 30, the company said.
Tags: Fairport, New York, North America, Ownership Changes, United States