October 29, 2007 — (WEB HOST INDUSTRY REVIEW) — Telecommunications provider Covad Communications Group (covad.com) announced on Monday that it has agreed to be acquired by Platinum Equity (platinumequity.com) for approximately $304 million in cash.
Platinum will pay $1.02 for each of Covad’s approximately 298 million shares outstanding. The deal price represents a premium of 59 percent to the stock’s closing price of 64 cents on Friday.
The purchase must be approved by Covad’s shareholders as well as Federal Communications Commission and state public utility commissions in many of the states in which Covad operates. The deal is expected to close in the second quarter of 2008.
“Platinum’s approach will bolster the successful execution of Covad’s business strategy while providing the resources and support necessary for sustained growth,” says Charles Hoffman, Covad president and CEO. “We believe that the resulting increased market competitiveness, improved capital structure and enhanced product and network capabilities best position our customers, partners and employees for the future.”
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