IPO Alert: Broadview Files Its S-1
The Rye Brook, N.Y., service provider filed an S-1 with the Securities and Exchange Commission (SEC) today but did not disclose any details about the IPO. The filing only states that it will raise up to $287.5 million.
The shares would be listed on the Nasdaq under a ticker symbol yet to be determined. Deutsche Bank AG and Jefferies & Company Inc. are the lead underwriters for the offering.
The prospectus says IPO proceeds would go towards "funding capital expenditures, acquisitions, and investments" -- the usual suspects.
Broadview provides voice, data, and IP-based services to small and medium sized business in northeast and mid-Atlantic states, covering an area that's been broadened by acquisitions.
Its most recent purchase, which closed at the end of May, was InfoHighway. (See Broadview to Acquire InfoHighway.) InfoHighway increased Broadview's reach in the New York metropolitan area and added about 500 "lit" buildings to its network, giving it direct access to customers.
Last year, Broadview strengthened its mid-Atlantic presence with the purchase of ATX Communications Inc. (See Broadview Buys ATX .)
In total, Broadview has 2,500 miles of metro and long-haul fiber in 20 markets. In the nine months ended September 30, it took in revenues of $326 million -- nearly double its take for the same period the previous year. But losses also continue to pile up, to the tune of $45.6 million for those nine months.
The S-1 also shows losses of $17.2 million for calendar 2006 and $21.5 million for 2005. Broadview had $29.5 million in cash and equivalents as of Sept. 30, down from $44 million at the end of 2006.
Broadview also leases lines from the local incumbent, Verizon Communications Inc. (NYSE: VZ). Those costs might get a lot higher if the Federal Communications Commission (FCC) grants Verizon's request to excuse it from sharing its DS1 and DS3 loop and transport facilities with competitors. (See Verizon Asks FCC to Undo Unbundling.) The FCC is expected to make a decision on that next week.
So it's possible that rising costs, ongoing losses, and the desire to make more acquisitions could be motivators for the filing.
— Raymond McConville, Reporter, Light Reading