Corvis Corporation agreed to acquire Chicago-based competitive local exchange carrier (CLEC) Focal Communications for $210 million. The deal is comprised of approximately $101 million in equity to be issued to Focal’s existing equity holders and the assumption of about $109 million of Focal’s existing debt and other obligations.
Focal Communications, which operates in 23 Tier 1 markets across the U.S., claims 4,000 enterprise and wholesale/carrier customers for its CLEC services. Focal also has its own metro fiber footprint in nine Tier 1 national markets. Focal expects to report annual revenues of approximately $320.0 million for fiscal 2003. As of December 31, 2003, Focal had cash and cash equivalents of $24.9 million.
Corvis owns Broadwing Communications, which operates an ultra-long haul, all-optical network and national IP backbone. The Focal acquisition is expected to expand the reach of Broadwing’s 18,500-mile nationwide all-optical network into targeted local markets. http://www.corvis.com
- In March 2003, Focal Communications, a CLEC serving 23 top U.S. markets, filed an amended reorganization plan with the U.S. bankruptcy court. The company emerged from Chapter 11 in July, having eliminated approximately $375 million of debt.
- Focal Communications is headed by Kathleen A. Perone, who joined the company in June 2002. She previously served with Level 3 Communications, MFS Communications and LighTrade.
