TelePacific Communications will gain approximately 3,500 broadband fixed wireless business customers in three states.
TelePacific Communications will acquire Covad Wireless, a broadband fixed wireless carrier.
TelePacific Communications, a California-based competitive local
exchange carrier providing integrated voice and data
telecommunications services to the small and medium-size business customer segment in California and Nevada, and MegaPath, a
provider of managed IP data, voice and security services in North
America, announced a definitive agreement for TelePacific to acquire
MegaPath's NextWeb subsidiary, Covad Wireless, a broadband fixed
wireless carrier operating in California and Nevada.
Under the terms of the agreement, TelePacific Communications will gain
approximately 3,500 broadband fixed wireless business customers in
California, Nevada and suburban Chicago through an all cash purchase of
capital stock. TelePacific's acquisition of Covad Wireless will expand
TelePacific's SMB services into the fixed wireless market with a
complementary network footprint.
The company said transaction benefits would include increased
availability of high bandwidth products to customers, the ability to
provision customers more quickly, and own the "last mile" which reduces
dependency on incumbent local exchange carriers (ILECs). A TelePacific
release also said the transaction would strengthen TelePacific's
position as the number one competitor to AT&T and Verizon for SMB
customers in the California and Nevada markets.
"Covad Wireless is an established innovator in fixed wireless broadband
delivery with demonstrated managerial and operational excellence," said
Dick Jalkut, president and CEO of TelePacific. "Benefits to new and
existing customers will be twofold-expanded fixed wireless service
offerings and the expertise of the entire Covad Wireless team."
Covad Wireless customers will gain access to TelePacific's business
services including converged voice and data networks in California and
Nevada, and wide area networking capabilities globally. Jalkut said the
addition of a broadband fixed wireless network allows TelePacific to
offer quick-to-deploy wireless Internet, and reinforce its business
continuity solutions with both wireless and wired network paths.
"Following our merger with Covad and Speakeasy, MegaPath is continuing
to refine our business with a focus on providing nationwide access,
security and voice services," said D. Craig Young, chairman and CEO of
MegaPath. "As a regional offering, Covad Wireless fell outside of our
strategic focus, and this agreement ensures that those customers are
The transaction is subject to customary closing conditions, including
federal regulatory approvals. TelePacific will assume operations
responsibility for the Covad Wireless customer base following
regulatory approval and closing, expected in the first or second
quarter of 2011. The financial and legal advisors to TelePacific were
Harriman & Co. and Gibson, Dunn & Crutcher LLP, respectively.
The exclusive legal advisor to MegaPath was Bingham McCutchen
LLP. "Throughout the closing process, there will be no impact to
Covad Wireless customer service or support," a company release said.
"TelePacific and Covad Wireless will work together to ensure a seamless
transition of customer service."
Nathan Eddy is Associate Editor, Midmarket, at eWEEK.com. Before joining eWEEK.com, Nate was a writer with ChannelWeb and he served as an editor at FierceMarkets. He is a graduate of the Medill School of Journalism at Northwestern University.