Covad + MegaPath + Speakeasy: Merger FAQ
We are pleased to announce today, September 1, 2010, the close of the agreement to combine Covad, Speakeasy, and MegaPath under the MegaPath brand. The three companies will begin to move through the integration process over the next several months moving toward a consolidated brand by the first quarter of 2011.
Why are these three companies coming together?
Together as one business, Covad, MegaPath, and Speakeasy will be better positioned to meet the needs of their current and future customers and partners. The new unified company will be the first managed services local exchange carrier (MSLEC) able to provide a full range of IP voice, security, and VPN and Internet services nationwide, making us the largest independent end-to-end provider of these services.
Additional strategic advantages include:
- Expanded broadband, VoIP, and network managed services portfolio
- Improved cost structure to differentiate our services to the wholesale and business channels
- Expanded talent pool
- Improved operating structure, delivering capital to invest in the business and to accelerate both top- and bottom-line growth
Who will own the new company?
The new company will be privately held by a group of investors, including the primary investor, Platinum Equity.
What is the role of Best Buy?
Best Buy will be an investor in the combined business.
What does this mean financially for the new company?
We will have greater economies of scale and a stronger position in the marketplace, with revenue over $550M.
Who will manage the new company at the senior level?
Craig Young, current CEO of MegaPath, will become executive chairman of the combined business. Pat Bennett will report to Young as the chief strategy officer, wholesale markets. Bruce Chatterley, former CEO of Speakeasy, will become president of the business markets.
What will the new company be called?
The new company will operate under the MegaPath company name. The three companies will transition to a new website and single brand name over a period of several months. Until that time, all three companies will benefit from the expanded portfolio, expertise, and reach of the combined resources.
What does each company bring to the new business?
All three companies are leaders in their respective focus areas:
- Covad is a leading national provider of IP broadband services.
- MegaPath is one of the largest managed service local exchange carriers (MSLEC) in North America, providing managed IP data, voice, and security services for SMB and enterprise customers.
- Speakeasy is a nationwide small business voice and data provider known for its industry-leading customer service and support.
How will the three separate companies transition into one?
Effective immediately, the three companies will legally become one new company and will begin the process of centralizing pricing, products, and promotions. In the short term, the companies will operate under their existing brand names.