Cbeyond stockholders will receive between $9.97 and $10 per share in cash. The exact amount will be determined based on stock transactions relating to previously granted stock awards to employees that occur after execution of the definitive agreement. At $9.97 per share, the purchase price represents a premium of 56.8 percent over Cbeyond’s stock price on Nov. 5, 2013, the trading date before Cbeyond announced its process to explore strategic alternatives, and a premium of 40.8 percent over the closing price of Cbeyond’s stock April 17.
Birch noted that the transaction:
• Creates a nationwide communications, cloud and managed services provider with approximately $700 million in annual revenue and approximately 200,000 business customers located in all 50 states, the District of Columbia, Canada and Puerto Rico;
• Serves customers at every stage of their business lifecycle — from an initial startup, to all sectors of the small- and medium-sized business marketplace, to an enterprise requiring a national solution across multiple offices and data centers; and
• Creates a nationwide IP-based network with approximately 10,000 fiber route miles, more than 500 fiber-lit buildings, 570 collocations and five data centers.
“This transaction will create a nationwide communications and technology services powerhouse and significantly advances our strategy
to drive top-line revenue growth by enhancing the premier communications, cloud and managed services that are available to our
business customers,” said Vincent M. Oddo, president/CEO of Birch. “The combined company will have a nationwide IP-network with a significant fiber infrastructure, an extensive data center presence in multiple markets, and a relentless focus on providing superior customer service.”
The Cbeyond transaction is the latest in a history of 21 acquisitions Birch has completed in recent years.
“The additional revenue scale, customer density, network reach and product offerings will allow us to comprehensively meet the evolving, longterm needs of our business customers,” said Oddo.
“We’re making this investment to serve our business customers in the best way possible for many years to come.”
The transaction has been unanimously approved by the boards of directors of both companies. The transaction is expected to close within six months, subject to customary conditions, including necessary approvals from federal and state regulators and the Cbeyond stockholders.
Birch has obtained financing commitments from PNC Capital Markets LLC and Jefferies Finance LLC.
Lazard is acting as the sole financial advisor and Jones Day is acting as the legal advisor to Birch in the transaction.
UBS Investment Bank is acting as the financial advisor and Latham & Watkins LLP is acting as the legal advisor to Cbeyond in the transaction.