Platinum Equity Adds Covad To Its Growing List of Telecom Acquisitions
Platinum Equity will pay $1.02 a share in cash, a 59% premium over the closing price of Covad's shares last Friday.
Covad Communications Group reported Monday that it has agreed to be acquired by Platinum Equity, which is adding to its roster of acquisitions, including many in telecommunications and communications markets.
Covad said Platinum Equity will pay $1.02 a share in cash in the deal, which represents a 59% premium over the closing price of Covad's shares last Friday; financial analysts said the acquisition will total $304 million.
Covad, a provider of integrated voice and data communications, markets a variety of products, including DSL, VoIP, T1, broadband wireless, Web hosting, dial-up, and bundled voice and data services.
"Our board of directors has determined that the substantial premium to the current market price provided by this transaction offers the best value for our stockholders," said Charles Hoffman, Covad's president and CEO, in a statement (pdf). He added that Covad's management believes Platinum will bolster Covad's business strategy and improve its market competitiveness, capital structure, and product and network capabilities.
Noting that Covad has a strong position in broadband delivery, Platinum's partner and head of global mergers and acquisitions, Johnny O. Lopez, said Platinum sees an opportunity for growing high-bandwidth services in the acquisition.
Platinum has acquired a long list of telecom and communications companies, including Altura Communication Solutions, Americatel, DCA Services, GeoLogic Solutions, Matrix Business Technologies, USRobotics, and Wireless Facilities' WFI deployment business.
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