Add-on Acquisition • Communications

TW Telecom Acquires Xspedius Communications

On October 1, 2006, TW Telecom acquired communications company Xspedius Communications from Meritage Funds and Thermo Telecom Partners for 532M USD

Acquisition Context
  • This is TW Telecom’s 1st transaction in the Communications sector.
  • This is TW Telecom’s largest (disclosed) transaction.
  • This is TW Telecom’s 1st transaction in the United States.
  • This is TW Telecom’s 1st transaction in Virginia.

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M&A Deal Summary

Date October 1, 2006
Target Xspedius Communications
Sector Communications
Buyer(s) TW Telecom
Sellers(s) Meritage Funds
Thermo Telecom Partners
Deal Type Add-on Acquisition
Deal Value 532M USD

Target Company

Xspedius Communications

Vienna, Virginia, United States
Xspedius Communications is a facilities-based provider of integrated communications services over proprietary fiber optics and virtual networks to small and medium-sized businesses in the southern U.S. The Company offers a variety of high quality communication services including long distance voice, data, and Internet.
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Buyer Overview 1

Buyer

TW Telecom

Littleton, Colorado, United States

Category Company
Founded 1993
Sector Communications
Employees3,397
Revenue 1.6B USD (2013)
DESCRIPTION

TW Telecom, Inc. provides managed network services in the United States. The company specializes in business Ethernet, data networking, converged, Internet protocol (IP) based virtual private network (IP VPN), Internet access, and voice, including voice over IP (VoIP), as well as network security services.


Deal Context for Buyer #
Overall 1 of 1
Sector: Communications 1 of 1
Type: Add-on Acquisition 1 of 1
State: Virginia 1 of 1
Country: United States 1 of 1
Year: 2006 1 of 1
Size (of disclosed) 1 of 1

Seller Profiles 2

SELLER

Meritage Funds

Arvada, Colorado, United States

Investor Investor


Category Growth Capital Firm
Founded 1998
PE ASSETS 1.0B USD
Size Large
Type Sector Focused
DESCRIPTION

Meritage Funds is a private investment firm focused on growth equity opportunities. The Firm targets companies that deliver tech-based services that leverage recurring revenue business models. Areas of interest include businesses that 'enable communications, deliver content, and facilitate commerce'. Prospective transaction situations include direct equity financings, recapitalizations, control acquisitions, consolidations, restructurings, spin-outs and management buy-outs. Meritage typically looks to commit $3 to $20 million over the lifecycle of an investment. Meritage Funds was formed in 1998 and is based in Arvada, Colorado.


Deal Context for Seller #
Overall 5 of 14
Sector: Communications 4 of 9
Type: Add-on Acquisition 2 of 8
State: Virginia 1 of 2
Country: United States 4 of 12
Year: 2006 1 of 1
Size (of disclosed) 4 of 10
PREVIOUS DEAL
DATE TARGET DEAL TYPE VALUE
2004-11-17 Inflow

Thornton, Colorado, United States

Inflow, Inc. is a data center operator providing facilities based IT services to companies with critical business and network applications over wired and virtual networks.

Sell $189M
FOLLOWING DEAL
DATE TARGET DEAL TYPE VALUE
2007-09-03 CompleTel SAS

Cedex, France

Completel Europe is a facilities-based provider of switched local access telecommunications and internet services to business end-users and carriers. The company operates nine fiber-based metropolitan area networks in France and in 2006 completed a DSL-based network expansion to increase its coverage to 110 markets in France.

Sell $1.1B
SELLER

Thermo Telecom Partners

Denver, Colorado, United States

Category Private Equity Firm
Founded 2001
Size Small
Type Sector Agnostic
DESCRIPTION

Thermo Capital Partners LLC is the private equity arm of Thermo Companies, an asset management firm that provides growth financing to small and middle market companies. Thermo Capital focuses on profitable, rapidly growing companies led by strong management teams. Thermo looks to invest $5 to $100 million per transaction. The Firm targets companies operating in the fields of telecommunications, technology and business services. Thermo Capital Partners LLC is based in Denver, Colorado.


Deal Context for Seller #
Overall 2 of 5
Sector: Communications 1 of 4
Type: Add-on Acquisition 1 of 1
State: Virginia 1 of 1
Country: United States 2 of 5
Year: 2006 2 of 3
Size (of disclosed) 1 of 1
PREVIOUS DEAL
DATE TARGET DEAL TYPE VALUE
2006-01-01 United Engines

Oklahoma City, Oklahoma, United States

United sells engineered equipment, parts and service to numerous markets including transportation, drilling, power generation, and oil field services.

Sell -
FOLLOWING DEAL
DATE TARGET DEAL TYPE VALUE
2006-11-02 Globalstar

Covington, Louisiana, United States

Globalstar is a provider of mobile satellite voice and data services. Globalstar offers these services to commercial and recreational users in more than 120 countries around the world. The company's products include mobile and fixed satellite telephones, simplex and duplex satellite data modems and flexible service packages. Globalstar was founded in 1993 and is based in Covington, Louisiana.

Sell -