High-speed Internet provider accepts $304 million offer.
Business broadband provider Covad Communications Group agreed Oct. 28 to accept a $304 million cash takeover offer from Platinum Equity, a private equity firm with headquarters in Beverly Hills, Calif.
Under the terms of the agreement unanimously approved by Covads Board of Directors, an affiliate of Platinum Equity will acquire Covad for $1.02 per share. The purchase price represents a 59 percent premium to the closing price of Covads shares on Oct. 26.
The transaction is subject to the approval of Covads shareholders and the approval of the Federal Communications Commission and state public utility commissions in many of the states in which Covad operates. The deal is expected to close in the second quarter of 2008.
"Platinums approach will bolster the successful execution of Covads business strategy while providing the resources and support necessary for sustained growth," Charles Hoffman, Covad president and CEO, said in a statement. "We believe that the resulting increased market competitiveness, improved capital structure and enhanced product and network capabilities best position our customers, partners and employees for the future."
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Covad, of San Jose, Calif., offers DSL, VOIP (voice over IP), T1, broadband wireless, Web hosting, managed security, IP and dial-up, and bundled voice and data services directly through Covads network and through Internet service providers, value-added resellers, telecommunications carriers and affinity groups to small and medium-sized businesses and home users.
"There is opportunity for growth as the demand for high-bandwidth services continues to evolve, and were eager to help Covad drive that growth," Johnny O. Lopez, partner and head of global mergers and acquisitions for Platinum Equity, said in a statement.
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