Interpath Sells Data Customers to US LEC

US LEC announced yesterday that it is acquiring more than 150 data customers from

Interpath Communications, a Research Triangle Park, N.C.-based ASP. Interpath is

in the process of merging with Annapolis, Md.-based USi and reports that it is selling its data customers because they are ancillary to the applications hosting business that will be the focus of the merged venture.

The merger of Interpath and USi was announced earlier this year when Boston-based Bain Capital invested $81.25 million in USi to lead the financially troubled ASP out of Chapter 11 bankruptcy protection. Bain also owns a controlling interest in Interpath (see USi Completes Reorganization With Interpath Merger).

Charlotte, N.C.-based US LEC is a large competitive local

exchange carrier (CLEC) providing services in the Southeastern and

Mid-Atlantic U.S. Its services include local phone, long distance

phone, calling card, toll free, dedicated Internet, digital private line,

and frame relay. The company also provides managed services for more than 3,000

select business clients.

The deal is not a large one for the company. Instead, it is a signal that

the company is interested in small acquisitions that will grow its business

but be easy to integrate.

“With this announcement,” said Aaron D. Cowell, Jr., US LEC president and

CEO, “we want to do three things. First, we want to get the message out to

our new customers. Second, we have always grown organically and we want

people out there to know we’re here and we’re healthy. Third, our investors

need to know that although we are interested in bite-sized acquisitions, we

are not on a binge.”

It certainly is a bite-sized acquisition, but it is not insignificant. In

its last quarter, the company recorded over $56 million in revenue. If each

new customer is paying $1,000 per month in services, the acquisition will

add about $1.8 million in annual revenue to the company. Financial terms of

the deal were not disclosed.

USi is listed by ASPnews a Top 20 Service Provider.


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