Just a bit over two months ago, Covad and MegaPath announced their plans to merge and their intention to form a national Managed Services Local Exchange Carrier (MSLEC). I speculated at the time that they might not be done yet, but I didn't really think they would strike again before consumating their own union. Nevertheless, yesterday it was Speakeasy joining the party, agreeing to merge with the two contingent on the first deal going through.
Speakeasy, which was bought by Best Buy in 2007 for $97M, focuses on managed voice and data services to the small enterprise. Those services will be combined with MegaPath's value added portfolio and put over Covad's national MPLS backbone. Sounds elegant, though I'm sure there have got to be some engineers involved that are a bit leery of the technical details of the planned ménage à trois.
All parties being privately held, the financial terms were not disclosed. However, it was surely a stock transaction as Best Buy will remain a minority investor in the combined company, and the deal is expected to be completed in the third quarter. Afterwards, MegaPath's CEO Craig Young will be executive chairman, Covad CEO Pat Bennet will be chief executive officer, and Speakeasy CEO Bruce Chatterley will be president of the commercial unit in charge of all non-wholesale customer sales and marketing division.
Are these guys done yet? Or will the roll-up continue? Surely they'll now wait for things to settle down first.
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