NuVox Communications Secures $87 million of Additional Equity Funding
Swamp Fox
NuVox Communications Secures $87 million of Additional Equity Funding
St. Louis, MO (September 24, 2001) - NuVox Communications, a rapidly growing,
facilities-based broadband services provider, announced that it has raised $87
million of additional equity in a private placement. NuVox had originally
targeted raising $75 million but increased the size of the offering due to
over-subscriptions. Salomon Smith Barney Inc. acted as NuVox's financial
advisor in connection with the financing.
NuVox provides facilities-based integrated voice and data services to business
customers in 30 markets in 13 contiguous states across the Midwest and
Southeast United States. The additional round of equity financing increases
NuVox's total capital to more than $775 million, including its $225 million
senior secured credit facility.
"We consider it to be a strong endorsement of our business strategy and
management team that we have been able to attract meaningful amounts of
additional capital for our company despite the prolonged downturn in private
and public equity markets and the challenging operating environment for
emerging telecommunications companies," said David L. Solomon, Chairman and
Chief Executive Officer of NuVox. "This additional capital fully funds the
continued development of our existing 30 markets and provides a cushion to see
us through these difficult times."
The investors include private equity funds associated with Goldman Sachs & Co.,
Whitney & Co., JP Morgan Partners, Meritage Private Equity Fund, Moore Capital,
Richland Ventures, Brooks Investments, Centennial Funds, Don Investment Group,
Norwest Equity Partners, First Union Capital Partners, Telecom Partners, Boston
Millenia Partners, Toronto Dominion Capital, OneLiberty Ventures, CIBC WMC Inc.
and Bank of America Capital Investors.
Michael R. Hannon, Partner of JP Morgan Partners, said "We believe the current
financial turmoil affecting emerging telecommunications companies presents
significant opportunities for investments in best managed, well capitalized
companies. NuVox has been able to post solid high growth results despite a
declining economic environment and difficult capital market conditions. Our
investing group believes that NuVox is well positioned to capture significant
market share by virtue of its strong customer focus, proven provisioning
capabilities and attractively priced service packages."
"This additional capital permits us to continue to invest in the development of
our markets and allows for demand-driven spending as we add customers," said
Mike Cassity, President and Chief Operating Officer of NuVox. "It provides
additional financial support for the pursuit of our strategic objective to be
the integrated communications provider of choice, delivering superior broadband
services and customer care."
NuVox's Southeast Division includes networks in South Carolina, North Carolina,
Georgia, Florida, Kentucky and Tennessee, and its Midwest Division has networks
in Missouri, Kansas, Oklahoma, Arkansas, Illinois, Indiana and Ohio. It has
been providing its voice and data services in an expanding number of U.S.
markets since it commenced its initial operations in St. Louis in June
1999.
Annualized revenues for NuVox's 30 markets totaled $94.6 million for August
2001, more than 37 times the $2.5 million of annualized revenues NuVox recorded
for December 1999. On-Net lines installed during the second quarter of 2001
totaled over 31,000 lines, a 31 percent increase over the first quarter of 2001
and a more than 625 percent increase from the second quarter of 2000. During
the same period, gross profit margins have increased from (9.7) percent in 1999
to 26 percent in August 2001. EBITDA loss margins in the second quarter of 2001
improved by over 4200 basis points over the first quarter of
2001.
Solomon added "We believe this level of growth and these results demonstrate
the validity of the assumptions we made when we developed our business plans
and confirm the attractiveness of our product offerings to business customers,
as well as the dedication of the entire NuVox team to providing high quality
responsive customer service. We remain committed to continued improvements in
results to achieve our goal of becoming EBITDA positive by the fourth quarter
of 2002 and attaining positive free cash flow by the end of 2003."
About NuVox Communications
NuVox Communications is a rapidly growing, facilities-based integrated
communications provider formed by the merger of Gabriel Communications and
TriVergent in November 2000. Serving 30 markets in 13 states across the Midwest
and Southeast, NuVox offers businesses and other end-users advanced integrated
voice, data and Internet products and services. The Company provides dedicated
high-speed Internet access; Web page design, development and hosting;
"traditional" local and long distance telephone services; and unified voice,
e-mail, and fax messaging as well as advanced data services. NuVox's growing
product portfolio also includes WAN management, audio conferencing, remote
access, and digital subscriber line (DSL) access. NuVox is privately held, and
its headquarters are located at 16090 Swingley Ridge Road, Suite 500, in
Chesterfield, MO 63017. The NuVox Communications Web site URL is www.nuvox.com.
Forward-Looking Statements
Some of the statements contained in this press release that are not historical
facts are "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and are subject to known and unknown risks,
uncertainties and other factors that could cause actual results to differ
materially from those contemplated by these statements. These forward-looking
statements are based on various factors and have been derived using numerous
assumptions. These forward-looking statements generally can be identified by
the use of forward-looking terminology such as "will," "may," "should,"
"believe," "intend," "expect," "anticipate," "project," "estimate" or "predict"
or the negative thereof or other variations thereon or comparable terminology.
NuVox wishes to caution readers of this press release that these
forward-looking statements regarding matters that are not historical facts are
only our predictions, assumptions and estimates regarding future events and
circumstances. Accordingly, NuVox can give no assurance that these predictions
and estimates will be realized. Actual events or results may differ materially
as a result of risks facing us, including risks regarding the continued
development of our business and the markets for our services and products.
Contact: Myron Hosea, Manager of Public Relations