Broadwing's Got a New Boss
Technically, the buyer is C III Communications LLC, a joint venture between majority shareholder Corvis Corp. (Nasdaq: CORV) and management firm Cequel III. Corvis was set to hold 96 percent of the partnership, according to SEC filings in March. The parent company of Broadwing -- which has reverted to its original identity of Cincinnati Bell (NYSE: CBB) (see Broadwing Reverts to Cincinnati Bell) -- was a 3 percent shareholder.
The deal closed for a price of roughly $91 million, less than the anticipated $128 million (see Corvis Notes Broadwing Wiggle Room); Corvis officials weren't immediately available to explain why. C III is also purchasing networking capital of $17 million, with payment deferred until next year.
Spagnolo, named interim CEO, has had an up-and-down career. He's been given credit for the ascension of UUNet, where he was CEO from 1997 to 2000, but his post-bubble fortunes haven't been so rosy.
Spagnolo left UUNet shortly after the WorldCom acquisition and did a stint as head of a startup called Sitesmith. That firm got acquired by Metromedia Fiber Network Inc.(MFN) (Nasdaq: MFNX), and Spagnolo eventually became president and COO there (see MFN Saved at the Bell).
MFN never managed a profit, and Spagnolo left in an April 2002 shakeup shortly before the company declared bankruptcy (see MFN Falls Into Chapter 11 and MFN Defaults, Switches CEO). Later that year, he took the interim CEO post at another struggling outfit, FLAG Telecom Group Ltd. (OTC: FLHLQ) (see FLAG Emerges From Chap. 11), where he was already on the board of directors. He stepped down in March when FLAG named Patrick Gallagher as CEO.
Meanwhile, Cincinnati Bell (NYSE: CCB) gets $108.7 million from C III as it reverts to its prior identity as a conventional phone carrier, probably to sighs of relief from its executives. "It seems funny -- POTS has become the attractive, glamorous side," says Lynda Starr, analyst with Probe Research Inc.. "But that was always the side that was making the money."
— Craig Matsumoto, Senior Editor, Light Reading