some interesting details about the focal buyout from new 10q. sounds to me like bwng got a pretty good deal as the purchase price was reduced to reflect all outstanding liabilities. i remember lots of speculation on corvis using its cash to buy something more expensive but seems like they made a wise decision...
"...On September 1, 2004, we invested approximately $97.7 million, including acquisition costs, and assumed $98.1 million in debt to acquire Focal. Focal is a Chicago-based competitive local exchange carrier that provides voice and data solutions to large and medium enterprises, including government entities, universities and other communication service providers. Focal has a local fiber network in 9 cities, offers services across the country in 23 Tier 1 markets from Boston to Miami and New York to Los Angeles, and maintains a 4,000 enterprise and wholesale/carrier customer base.
The Merger Agreement, dated March 3, 2004, provided for a purchase price of $210.0 million, which was reduced by $78.6 million in assumed debt outstanding, $19.5 million in assumed capitalized lease obligations, and a reduction of $14.2 million due to the stock price trading below the low end of the range at the time of acquisition as explained below. The purchase price was also increased by an interest factor accruing from the date that Focal satisfied the conditions to closing until the closing occurred.
At closing, the purchase price was determined to be $97.7 million, comprised of approximately $94.2 million of our common stock issued to Focal's equity holders, of which $0.2 million relates to interest, and $3.6 million paid in cash. Per the Merger Agreement, the number of shares of common stock to be issued was determined based on the average closing price for the 20-day period ending three days before closing not to exceed a range between $12.70 and $29.50 per share. Because the 20 trading day average was less than $12.70 per share, the per share valuation used at the closing was $12.70, with Focal stockholders receiving a total of 8,641,829 shares of our common stock, of which 18,209 shares were issued at a settlement rate of $10.20 related to interest...." |
