Covad Communications Group Inc. has signed a definitive agreement to be acquired by Beverly Hills private equity group Platinum Equity in a $304 million, $1.02/share, all-cash deal. Covad provides voice and data communications products, including broadband Internet, data communications, Internet access connectivity and voice over Internet protocol (VoIP) telephony, to consumers and businesses. Covad's board unanimously approved the buyout, which values the San Jose, CA provider of integrated voice and data communications at a 59% premium to Friday's closing price. The transaction is subject shareholder approval as well as customary closing conditions, including FCC approval and the approval of state public utility commissions in many of the states in which Covad operates. The deal is expected to close in 2Q08. According to Covad CEO Charles Hoffman, "our Board of Directors has determined that the substantial premium to the current market price provided by this transaction offers the best value for our stockholders... Platinum’s approach will bolster the successful execution of Covad’s business strategy while providing the resources and support necessary for sustained growth."
Commentary: Covad Agreement Lifts Shares in MicroCap VoIP Player Vodavi Technology • Cramer on DVW
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