McLeodUSA Inc. (www.mcleodusa.com) will acquire CapRock Communications Corp. (www.caprock.com) in a stock-for-stock transaction that includes $197 million in equity and net assumed debt of $335 million. With the purchase of CapRock, McLeodUSA will extend its reach into four new states and add 5,200 route miles of fiber to its network.
"The addition of CapRock is a continuation of our pattern of acquiring companies to provide the seed for staged growth in new markets," Clark McLeod, McLeodUSA's chairman and CEO, said in a statement.
Arkansas, Louisiana, Oklahoma and Texas will be added to McLeodUSA's CLEC footprint. The purchase also brings the company 12 new voice switches and 17 data switches. The combined operations will be able to provide integrated communications services to 25 states and advanced data services in all 50 states.
As of the end of the third quarter 2000, CapRock had 95,000 access lines and 65 operational collocations. Another 135 collocations were under construction.
Under the terms of the agreement, CapRock shareholders will receive 0.3876 of a share of McLeod Class A common stock for each CapRock share they own. The merger is expected to close sometime during the first quarter of 2001.
