Corvis Corp., the owner of Broadwing Communications, on Monday disclosed plans to acquire Focal Communications Corp. in an agreement valued at $210 million. Corvis said it expected the agreement to close in the late summer.
Broadwing gains a local-phone component to its offering through the acquisition. Corvis says the agreement “would help accelerate its progress with its voice over Internet Protocol services offering” and support an initiative aimed at reducing local loop or access charges.
The competitive wireline sector has been consolidating over the last year, with the planned acquisition of Allegiance Telecom Inc. by XO Communications Inc. ranking among the most high-profile deals.
Corvis, based in Columbia, Md., also says the acquisition will help slash planned capital expenditures for Broadwing’s voice network. Furthermore, Focal is expected to realize cost savings on long-haul transport and switching by using the Broadwing network, according to Corvis. Broadwing and privately held Focal both provide communications services to businesses and other telecom providers.
For the fiscal year 2003, Focal expects to report annual revenue of $320 million, according to Corvis. Chicago-based Focal announced emerging from bankruptcy in July 2003. As of Dec. 31, Focal had cash and cash equivalents of $24.9 million, according to Corvis.
