Covad Communications Co. Thursday acquired LaserLink.net, a leading virtual Internet service provider.
This deal allows Covad (COVD)
to provide branded broadband solutions to companies seeking broadband Internet access for their customers.
Covad will issue 4.3 million pre-split shares of Covad common stock for all
LaserLink.net outstanding shares and assume outstanding debt. The
transaction is valued at $387 million as of Wednesday’s market close.
Covad will operate LaserLink.net as a separate business unit after the
acquisition closes. George McGovern, LaserLink.net chairman and chief
executive officer will continue to head up the operating unit and report to
Robert E. Knowling, Jr., Covad chairman, president and chief executive
officer.
Covad plans to broaden its service offering for customizable broadband
connectivity, targeting personal computer manufacturers, e-tailers, and
companies seeking a way to enhance their Internet brand identities.
Robert Davenport, Covad executive vice president of corporate development,
said the deal helps it drive the adoption of broadband services nationwide
and delivers a key component to Covad’s channel distribution strategy.
“LaserLink.net’s integrated customer management capabilities will enable
Covad to provide a complete solution to a broader range of channel
partners, increasing the choice of places where end-users can buy
high-speed access to the Internet,” Davenport said.
LaserLink.net’s George McGovern said Covad’s buy out affirms its commitment
to branded broadband services.
“LaserLink.net designed its business with the belief that the Internet will
revolutionize the way business is transacted,” McGovern said. “Joining
Covad means that we have the capability to accelerate the promise of the
Internet by jointly offering broadband capabilities to our customers.”
At the heart of the acquisition is Covad’s newfound ability to provide
virtual broadband services to a ravenous high-speed marketplace.
Along with providing nationwide DSL network connections, Covad plans to
offer the fully branded Internet services including help desk support,
Internet access software, e-mail and billing services, news feed and
personal web space for subscribers.
Bob Roblin, Covad executive vice president of sales and marketing said
LaserLink.net’s indirect channel model is consistent with its leveraged
channel go-to-market strategy.
“This new distribution channel for Covad means more choice for end-users
because it allows end-users to purchase the services they desire from their
provider of choice,” Roblin said.
In related news, Covad this week introduced its DSL Plus Internet Protocol
service bundle as part of its broadband offering to ISPs. By integrating
Covad’s broadband network with IP services, Covad aspires to become ISPs
preferred source for DSL access.
Some of the first ISPs scheduled to utilize Covad’s “DSL Plus IP” service
offering include Juno Online
Services, Prodigy Communications
Corp., and 1stUp.com
Corp.
Rich Wong, Covad vice president of marketing, said the IP service bundle
allows it to provide ISP’s with a new set of value-added network services.
“Now our ISPs have a choice that enables them to focus on providing their
unique brand experience to end users, while Covad handles the set-up and
management of the network infrastructure,” Wong said. “In addition, these
value-added network services lay the foundation for delivering broadband
services such as video and audio streaming.”
Covad’s DSL Plus IP service is currently available in San Fra
ncisco,
Chicago and New York, and will be available throughout Covad’s network by
August.
Based in Santa Clara, Calif., Covad provides nationwide DSL services to
Internet service providers, telecommunications carriers, enterprises,
personal computer manufacturers and application service providers. Covad
broadband services are available in 62 of the top metropolitan areas of the
U.S., with its broadband buildout set to serve 100 metropolitan markets by
the end of this year.
