It seems like three years ago that PAETEC (news, filings) unveiled plans to build a new headquarters in downtown Rochester as part of a rejuvenation campaign there. Oh wait, it actually has been that long - such are the ways of real estate, the economy, and municipal government. Yesterday the company reaffirmed those plans yet again , and said construction will soon begin. Of course, the city still hasn't quite finished demolishing the old building, but first things first. They scaled back plans from 37 stories to perhaps just 10 two years ago in the face of the 2008-2009 recession, I wonder what that number is nowadays.
PAETEC of course has been quite busy lately, having closed the Cavalier acquisition and also purchasing its own billing software line from FTS. They are much larger, diverse company than they first made those plans for a new HQ in 2007. Along with revenues now running the $2B range annually, the company now manages a substantial amount of intercity and metropolitan fiber. It will be interesting to see if they can leverage that fiber to raise their EBITDA margins and thus find their way to profitability in the next year or two.
As to the question of why PAETEC wants to get involved in Rochester real estate rather than rent, well why not? After all, they're already in the datacenter, software, energy, fixed wireless, and CPE businesses in addition to their main CLEC line. So what's one more?
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