US LEC's acquisition of Fastnet's assets, which include Internet access, colocation and managed hosting unit, has been approved

December 5, 2003

3 Min Read

CHARLOTTE, N.C. -- Accelerating its strong growth in data and Internet services and its presence in the Mid-Atlantic and Northeast, US LEC Corp. (Nasdaq: CLEC), a super-regional telecommunications carrier providing integrated voice, data and Internet services to businesses, announced today that its bid to purchase substantially all of the assets of FASTNET® Corporation has been approved. These assets include the Broadband and Dial-Up Internet Access, Co-location, and Managed Hosting business units of FASTNET, as well as two data centers in eastern Pennsylvania. The United States Bankruptcy Court for the Eastern District of Pennsylvania accepted the US LEC asset purchase agreement and bid worth approximately $8.5 million and the assumption of certain liabilities.

The FASTNET purchase will contribute approximately $24 million in annualized end-customer data revenue to US LEC, a significant addition to the competitive carrier's data revenue, which grew nearly 85 percent in the third quarter of 2003 over the same period in 2002. US LEC will gain nearly 2,100 business customers with dedicated Internet or data center services, as well as an additional 26,000 shared Web hosting and dial-up Internet customers.

"We are very excited about the addition of FASTNET to US LEC. By integrating the FASTNET and US LEC networks, this transaction is immediately EBITDA and cash flow accretive to US LEC," said Aaron Cowell, president and CEO for US LEC. "We gain two data centers and add new and improved data and Internet services to our product suite, which we plan to offer to our customers. We also significantly grow our market share in Pennsylvania, New York and New Jersey with the addition of nearly 30,000 FASTNET customers."

Cowell continued, "The FASTNET team shares our commitment to providing outstanding service to customers. We plan on maintaining a significant presence in the greater Lehigh Valley and Philadelphia areas, and are very pleased to add more than 80 dedicated data and customer care professionals to our team. US LEC will continue to provide FASTNET customers with the same high-quality services to which they are accustomed. We also intend to leverage FASTNET's robust network to expand our voice, data and Internet service offerings throughout the FASTNET operating territory. "

Mike Robinson, executive vice president and CFO for US LEC added, "The FASTNET transaction is consistent with our business plan to strategically act when presented with the right opportunity. This acquisition was funded by the proceeds of our recent private placement of common stock that raised $10 million. The final US LEC bid of $8.5 million includes $6 million in cash, $1 million of US LEC Class A common stock, and a $1.5 million note, along with the assumption of certain liabilities. With the addition of approximately $24 million annually in end-customer revenue, we expect to see the immediate positive impact on our bottom line."

"This transaction solidifies and enhances our current and future plans for data product and service growth," said Jeff Blackey, senior vice president for US LEC. "In addition to the ISP and broadband data services, the FASTNET product suite provides extensive value-added data services including advanced technical support, dedicated and shared Web hosting, co-location, data storage/disaster recovery and managed services to provide extensive monitoring of the customers' services and network."

US LEC Corp.Fastnet Corp.

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