Two-thirds of holding company, New Paetec, to be owned by Paetec shareholders.
NEW YORK — Telecoms services companies US LEC Corp. and privately-held Paetec Communications said Monday they had agreed to merge into a new entity with an estimated enterprise value of $1.3 billion.
According to the deal, the two companies will become wholly owned subsidiaries of a new public holding company, New Paetec, that will continue trading under the Nasdaq symbol “CLEC.”
Both companies supply communications services to medium and large-sized businesses, from telephone systems used over the Internet to network security.
US LEC shareholders will own about one-third of the new holding company, while Paetec investors will own about two-thirds.
US LEC has also entered into an agreement to buy back its Series A preferred stock held by private equity firms Bain Capital and Thomas H. Lee Partners at a $30 million discount to its accreted value.
Combined pro forma revenue is estimated at nearly $1 billion, with adjusted earnings before interest, tax, depreciation and amortization of $187 million.
The two companies expect cost saving of $25 million in the first year after closing, expected in the fourth quarter, with an additional $40 million in annual savings beginning in 2008.
Fuente: CNN, con información de Reuters