Interpath Undergoes Ownership Change
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Interpath Communications, Inc. announced yesterday a change in ownership from Carolina Power and Light (CP&L) to Bain Capital, Inc. in a spin-off deal between the two companies.
Interpath Communications, Inc. offers a variety of e-commerce and enterprise applications based on applications from Vignette, SAP, Microsoft, Netscape and Broadvision. Prior to the announcement, Interpath was a wholly owned subsidiary of CL&P.
In a move designed to unlock the full-service ASP market value, CP&L and Bain each will invest $50 million in Interpath.
According to Michael Fox, interim president and chief financial officer, Interpath, the company plans to expand its sales force and marketing to a national level. "We will look at additional applications," he said. "With this funding, we can continue the business plan we had in place and expand to a national level."
"Bain has a tremendous track record," he said. "For CP&L to relinquish control to a company like Bain says a lot about both parties. Bain is the best engine for them to realize the full value of their position."
Fox realizes the deal allows Interpath and its employees to have a more concentrated focus-selling, delivering and supporting its e-business applications and services to the mid- to large-size enterprise marketplace.
Upon completion of the transaction, Bain will own 65 percent and CP&L will own 35% of Interpath.
Interpath was the only ASP to own its own fiber infrastructure, but will relinquish ownership to CP&L once the deal is complete.
"Owning the actual glass in the ground isn't important," he said. "Nobody owns the glass from end-to-end. What is important is that the ASP owns and operates the IP layer from end-to-end."
Fox explained that the fiber optic aspect was not being maximized by Interpath. "For it to support just an ASP business would have been similar to a waste of talent," he said. "We wouldn't have been able to leverage it to its full extent."
CP&L will also retain about 50 employees and its 10 percent limited partnership interest in the BellSouth PCS business. The remaining 450 employees will be retained by the Bain-owned Interpath to service the company's ASP and data services operations.