Birch Telecom and Ionex Telecom announced plans to merge, creating one of the largest CLECs in the southern and central US. Birch Telecom offers local and long-distance telephone service across 10 states. Ionex is a privately owned integrated communications provider serving small to medium-sized business customers in Texas, Oklahoma, Kansas and Missouri. The combined company will serve over 500,000 telephone lines, heavily concentrated in Texas, Oklahoma, Missouri and Kansas, and generate $350 million in annual revenues. The new company will use the Birch Telecom name. As part of the deal, an investment group led by Gilbert Global Equity Partners, AEA Investors, Veronis Suhler Stevenson LLC and Texas Growth Fund — the major backers of Ionex — will provide over $40 million in equity funding.
http://www.ionex.com
http://www.birch.com
- In September-2002, Birch Telecom completed the reorganization of its debt and emerged from bankruptcy, just two months after filing for Chapter 11. Under the reorganization, bank lenders cut their debt in half to about $100 million and received 80% of the company’s equity. Bondholders exchanged all their debt — about $133 million — for a 20% stake in the company.
- Birch Telecom was formed in 1997 as one of the first CLECs certified in the Midwest to provide competitive local phone service. Birch Telecom is led by co-founder Dave Scott, who previously was president of Kansas City FiberNet, a competitive local exchange carrier owned jointly by the country’s two largest cable operators, TCI and Time Warner. Birch Telecom is based in Kansas City, Missouri.
- Ionex operates an ATM network that includes 97 co-locations in Texas, Oklahoma and Kansas. The company is headed by Rick Pontin, who previously served as President and Chief Operating Officer of Broadwing Communications. Ionex was founded in 1999 and is based in Dallas, Texas.