Pac-West Telecomm, UPH to be acquired by TNCI

Pac-West Telecomm and UniPoint Holdings (UPH) will begin writing their latest chapters as the competitive service providers were acquired by TNCI Operating Company, a new entity consisting of Garrison Investment Group and Blue Casa Telephone. Financial details of the deal were not disclosed.

TNCI will enhance its presence in nine Western U.S. states with a dense retail and wholesale network via the purchase. In addition, TNCI said it will leverage Pac-West's current hosted PBX solution across all of the services it provides via its acquired subsidiaries to its customer base.  

Jeff Compton, CEO and president of TNCI, said in interview with FierceTelecom that its goal is to put the Pac-West network to a new use to attract a mix of former and new customers.

"Through the trials and tribulations, the Pac-West network was forgotten and deemphasized and what you have is the same network that should be embraced and brought back to the prominence that it used to have," he said. "Our goal with that network is to bring that back and plan to utilize it for our existing TNCI customer base and open it up to wholesale people that might have left and people that may discover it for the first time."

Set to close the week of Sept. 9, the two companies will be rebranded as TNCI with current e-mail and website domains going to TNCI site when integration is complete.

"Pac-West has an incredible brand and incredible position in the CLEC history, but it's important for clarity and unity that it becomes part of TNCI wholly within the operating structure, within the personnel, and within the branding," Compton said.

Compton added that it will also unveil a new marketing campaign to reintroduce the TNCI brand, which was originally known as Trans National Communications International.

Pac-West is just one acquisition TNCI will make as it looks to become a larger national player. Compton said that it plans to acquire three to five other facilities-based providers.

"This Pac-West acquisition takes care of about 30 percent of that when you look at the nine Western States and the network that's in place," Compton said. "Not only does it create a home to migrate our resale off-net customers in these nine states onto this network, but when you look at the next step of going East and getting the Southeast, the Northeast and the Midwest and link these together we'd be a national facilities-based Tier 1 provider."

Unlike other CLECs that have had to go and borrow money to fund new deals, TNCI will leverage the financial backing of the Garrison Investment Group.

"We chose to go out and get Garrison as a financial backer to the deals, and they contributed 100 percent of the money for TNCI and Pac-West in 100 percent equity, so we had no debt on the TNCI balance sheet," Compton said. "They are committed to our next couple of deals also in equity with no debt."

This acquisition could mark the end of a troubled time for both Pac-West and TNCI.

In April, Pac-West filed for Chapter 11 bankruptcy protection and the South Dakota Public Utility Commission (PUC) revoked its certificate to operate in the state due to unpaid taxes. At the time of its bankruptcy protection filing, Pac-West owed money to over 20 creditors, many of which are a mix of large service providers and CLECs including AT&T (NYSE: T), CenturyLink (NYSE: CTL), Frontier (Nasdaq: FTR), Telus (Toronto: T.TO), and Alpheus Communications.

In October 2011, TNCI filed for Chapter 11 protection. Like Pac-West, TNCI also owed debts to a list of major telcos including AT&T, CenturyLink, Sprint (NYSE: S) and Verizon (NYSE: VZ).

For more:
- see the release

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