Covad Communications has agreed to be acquired by Platinum Equity for $304 million, a deal which extends two ongoing trends: Private equity investments and acquisitions in telecom, and the consolidation of the CLEC market. Covad has survived a great deal of telecom industry turbulence over the years, but factors such as naked DSL, access charge forbearance and local/long-distance re-unification have made it still more difficult for non-incumbent telcos to compete.
Meanwhile, Covad also has broadband wireless assets and an enterprise market foothold that position it well for the future. Can a private equity firm help it find--and fund--the opportunities that allow it to thrive in the land of telecom giants?
- Telephony has the story
- Reports circulated recently that Best Buy might buy Covad