NewSouth Communications and NuVox Communications Announce Merger Plans
Two leading, high-growth communications companies sign definitive agreement
Greenville, SC and St. Louis, MO - February 25, 2004
NewSouth Holdings, Inc. and NuVox, Inc. today jointly announced that they had signed a definitive agreement for a merger of equals of the two privately held facilities-based communications providers. The combined company will operate under the name NuVox Communications, and will provide local, long distance, data, Internet, and advanced communications services to business customers across the Southeast and the Midwest. The combined enterprise would initially have approximately 36,000 business customers, 500,000 access lines in service, and annualized revenues exceeding $300 million.
"The combination of NewSouth and NuVox will very quickly allow for more robust products and services for the current customers of both existing companies, and further allow us to market to a wider base of business customers across our markets. Better products, better business solutions for our customers, and a larger potential customer base position the new NuVox to take full advantage of the growth potential in our markets," stated Jim Akerhielm, President & Chief Executive Officer of NewSouth Communications.
"Combining these two already successful competitive local exchange carriers (CLECs) with complementary customer markets, overlapping geographic targets, and profitable operations makes very good strategic sense and is definitely a win-win proposition," said David L. Solomon, Chairman and Chief Executive Officer of NuVox Communications. "Together, the new company can build on the strengths and experience of each company and thereby position us as the leading provider of communications services to business customers in the Southeast and Midwest."
The senior management team will be comprised of individuals from both NewSouth and NuVox. Leading the new company will be Akerhielm, who will serve as CEO, and Solomon, who will become Chairman of the Board. Other members of the management team will be announced later.
"Both NewSouth and NuVox have made significant investments in technology and the buildout of their networks. Combining the two networks allows for a number of operational and financial efficiencies enabling us to truly leverage this investment in technology, and ultimately to accelerate profitability in the new company," commented James H. Greene, Jr., a partner at Kohlberg Kravis Roberts & Co. (KKR). Greene has served on the Board of Directors for NewSouth since KKR's initial investment in 2000, and will continue to serve as a board member for the new company.
"Consolidation in the telecommunications space is well underway, but unlike many mergers, the NuVox/NewSouth combination makes for not just a bigger company, but a much stronger company," said Michael R. Hannon, Partner at JP Morgan Partners, the private equity affiliate of JP Morgan Chase. "The proven track record of this management team and very compelling financial results absolutely support the future growth of the new NuVox Communications. We are extremely excited to continue our involvement with the new company." Hannon serves on the Board of Directors of NuVox Communications, and will hold a seat on the new board.
The combined company will be headquartered in Greenville, SC. St. Louis, MO, will continue to support a strong regional focus for the new company. The transaction is expected to close by May 2004. Until closing, NewSouth Communications and NuVox Communications will continue to operate separately. Customers of both companies will not experience changes to their existing service agreements. New or revised customer contracts will not be required as a result of the merger.
The merger has been approved by the Boards of Directors of both NewSouth and NuVox. Financial terms of the proposed merger were not disclosed. Completion of the transaction is subject to approval by the stockholders of both companies, as well as regulatory approvals and customary closing conditions.
About NewSouth Communications
Headquartered in Greenville, South Carolina, NewSouth Communications is a privately held broadband Integrated Communications Provider (ICP) serving business customers in Florida, Georgia, South Carolina, North Carolina, Tennessee, Alabama, Kentucky, Mississippi, and Louisiana. Founded in 1997, the company offers a comprehensive selection of data, Internet, voice, and other advanced communications solutions. NewSouth has completed its network, which includes Cisco packet-based switches, Lucent Technologies, Inc. AnyMedia™ 5ESS-2000 switches, and Siemens Information and Communications Networks EWSD digital switches. For more information, visit http://www.newsouth.com.
About NuVox Communications
NuVox Communications, a privately held Integrated Communications Provider based in St. Louis, MO, offers businesses and other end-users advanced integrated voice, data, and Internet products and services. The company provides dedicated and dial-up high-speed Internet access; Web site design 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, and remote access. NuVox provides its integrated voice and data services through advanced Nortel switches. NuVox is operating an LD network based on the Sonus Insignus platform. For more information, visit http://www.nuvox.com.