Paetec to buy Cavalier

The Associated Press September 13, 2010, 10:51AM ET
Paetec buying rival telecom Cavalier for $460M
FAIRPORT, N.Y.

Paetec Holding Corp., which provides voice and data services to businesses, will buy rival Cavalier Telephone Corp. for $460 million in cash, the company said Monday.

The move will expand the reach of Fairport-based Paetec’s network with 17,000 miles of optical fiber, it said. Cavalier is privately held, with the largest owner being M/C Venture Partners, a Boston private equity firm.

FBR Capital Markets analyst David Dixon said the deal represented an “opportunistic acquisition” of competitor that was under financial pressure, unlike Paetec, which stabilized its revenue in the previous quarter.

Paetec shares rose 24 cents, or 5.8 percent, to $4.39 in morning trading.

Cavalier, which is based in Richmond, Va., provides business services in 15 Eastern states and Washington D.C. It provides residential service in Baltimore, Philadelphia, Pittsburgh, Detroit and a few other cities.

Taken together, Paetec and Cavalier generated revenue of about $1.95 billion over the year ended June 30, the company said.

Cavalier established a presence in the South and Midwest when it acquired the assets of the old Network Telephone as part of another acquisition.

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2 Responses to “Paetec to buy Cavalier”

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