AGIS Sold to Swedes
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Telia Internet is controlled by Swedish telecom giant Telia A.B., which reportedly maintains in excess of $100 million in assets so the transaction is expected to sail through regular federal reviews.
Cogent Communications Inc. ran the price of the sale up from its estimated $15 million value in a bidding war with Telia. Cogent wanted desperately to own a backbone in support of its multi-tenant building Internet operations. The firm is currently constructing its own backbone from dark fiber leased predominantly from Metromedia Fiber Inc. (MFNX).
The AGIS auction was conducted in the U.S.Bankruptcy Court for the Eastern District of Michigan over the past two months while Telia and Cogent battled with bids for the defunct backbone provider.
Established in 1994 by Phillip J. Lawlor, the small backbone operator provided network services to more than 300 regional Bell operating centers, content providers, large corporations and independent Internet service providers.
Although the company had established strategic relationships with successful telecommunications companies like ALLTEL Corp. (AT) and Qwest Corp.(QWST), the financial infusions were not enough to save the oldest Internet backbone from financial decay. The firm filed for Chapter 11 reorganization early in March while it sought relief from its creditors.