US broadband provider Paetec Holding has signed a definitive merger agreement to acquire Cavalier Telephone for US$460m.
The acquisition of privately-held Cavalier will increase Paetec’s fibre-optic network assets by 17,000 route miles.
Arunas A….
US broadband provider Paetec Holding has signed a definitive merger agreement to acquire Cavalier Telephone for US$460m.
The acquisition of privately-held Cavalier will increase Paetec’s fibre-optic network assets by 17,000 route miles.
Arunas A. Chesonis, chairman and CEO of Paetec, said: “Cavalier’s fiber infrastructure, network assets and corporate culture make it a perfect match for Paetec and dramatically strengthen the company in the Eastern United States.”
According to Paetec, the company has entered into a financing commitment with Deutsche Bank AG Cayman Islands Branch, Deutsche Bank Securities, Banc of America Bridge LLC, and Banc of America Securities LLC for the leverage neutral transaction.
The company added that its ratio of net-debt to LTM adjusted EBITDA will continue at the relatively constant level of 3.4 times Cavalier’s outstanding net indebtedness, which is around US$336m, and will be repaid at closing.
Paetec is being financially advised by Deutsche Bank Securities and BofA Merrill Lynch. Skadden, Arps, Slate, Meagher & Flom LLP & Affiliates are acting as its M&A counsel, with Hogan Lovells US LLP acting as counsel on the anticipated financing.
Cavalier has appointed Evercore Partners as financial advisor and Edwards Angell Palmer & Dodge LLP as legal advisor.
Paetec said the combined group would have generated around US$381m in adjusted EBITDA and US$1.950bn in revenue for the year ended June 30, 2010, on a pro forma basis.
