Hi Phil,
>>Not that I'm skeptical, actually wish I could get a copy of their business plan!<<
Yes, me too. And I too am a little skeptical about this, although I really haven't anything concrete to go on that should make me so. Let's just say I'm cautious. <g>
The vendor financing angle came to my mind too. About a year ago, LU got stuck with backlog and shipped hardware on a pile of ESSs in the southwest when another company, US ONE Communications Corp., and Phoenix Networks had their chips pulled off the table in a deal gone south. PHX was to be the reseller {customer base) for the facilities based US ONE who over-extended themselves with multiple 5Es before they should have.
When all was said and done, the burden to LU was in the area of 120 to 130 MM if my memory serves me accurately. The deal that finally untangled this one involved a rash of legal actions, and an eventual multi-party auction of sorts (see below).
The subscriber base of Phoenix wound up getting acquired by QWST, as one of their first acquisitions as a public co.
And US ONE Corp.? Winstar bought them. Small world, isn't it? If you're interested in a little recent history going back 9 and 14 months, you can read both articles follow annotated by yours truly.
Regards, Frank Coluccio
--------------------
Phoenix Network and US ONE
Communications Corp. Extend
Letter of Intent Despite Lucent
Petition
June 10, 1997
GOLDEN, Colo., June 9 /PRNewswire/ via Individual Inc. --
Phoenix Network, Inc. (AMEX: PHX) announced today that it has
elected to extend the termination date of its letter of intent with US
One Communications Corporation ("US One") regarding the terms
of a merger of the two companies. This news comes on the heels
of a filing against US One by Lucent Technologies, Inc. of a
petition for involuntary bankruptcy under Chapter 7 of the
Bankruptcy Code. Notwithstanding the Lucent petition, Phoenix
believes that a business combination between it and US One
remains viable, and Phoenix and US One are working toward a
resolution of the Lucent dispute that will be beneficial to all
parties involved.
Phoenix's letter of intent with US One, previously set to expire on
June 9, 1997, has been extended to July 7, 1997.
Phoenix Network is an inter-exchange carrier (IXC) which, in
addition to its core long distance products and services, offers
Internet access, enhanced fax services, international call-back,
conference calling, travel cards, debit cards, custom invoices,
management reports, and a variety of other products and services.
Phoenix Network's World Wide Web address is (
phoenixnet.com).
US ONE Communications Corp. is a national value-added
telecommunications service company built to capitalize on the
trend toward increasing competition in the telecommunications
industry. US ONE's service offerings include Carrier Controlled
Switching (CCS), exchange access service and, in the near future,
wholesale and retail local dialtone.
SOURCE Phoenix Network, Inc.
/CONTACT: Monica Williamson of Phoenix Network Investor
Relations, 800-448-0804/ (PHX LU)
All,
If I'm not mistaken, the Phoenix Network below was on the trail of US One for some time, until US One was bought for a steal at auction by Winstar. Winstar has been buying up quite a few distressed properties recently, along with Good Net, the ATM-based ISP that supports the current Ftel Pilot in NY.
Frank
-----
Qwest buys some customers
By Leyla Kokmen
Denver Post Business Writer
Jan. 7 - 1998 Accelerating its move into the commercial long-distance and data
communications markets, Qwest Communications International Inc. said Tuesday it
will acquire Phoenix Network Inc. - and its 40,000 business customers - for a
bargain-basement price.
The acquisition of Phoenix Network, a reseller of long-distance services based in
Golden, almost doubles Qwest's market presence among business customers.
Previously Qwest had about 50,000 business customers for long-distance and
Internet service, some of which came from Qwest's acquisition of Denver's
SuperNet last fall. Qwest also has about 300,000 residential customers.
Phoenix Network will receive $28.5 million of Qwest common stock and up to $4
million of cash from the Denver-based communications company. In the transaction,
Qwest will also assume about $13 million of debt, bringing the total cost of the deal
to about $45.5 million.
That cost, said industry analysts and Qwest officials, is very low. It's only about 60
cents for every dollar of the $75 million in revenue Phoenix Network had last year.
In an industry where acquisitions can cost between 1.3 to 2.5 times a company's
annual revenue, buying one for only 0.6 times that revenue is a significant value, said
Lew Wilks, Qwest's president of business markets.
"They basically for a very low cost have acquired 40,000 business customers,
which helps them on their way to building their business in that area," said Christine
Nairne, an analyst with Hambrecht and Quist in |
