Covad Bought By Platinum Equity$304 million deal, or $1.02 per share... ( old news - 09:01AM Monday Oct 29 2007) tags: dsl · business · clec · Covad CommunicationsTipped by Raybro  Earlier this month, a Covad insider tipped us off to the fact that the CLEC was shopping itself around to potential sugar daddies, with names like AT&T, Sprint and even Best Buy being tossed around as acquisition partners. In the end, however, it appears that Covad got the best deal from Platinum Equity, who will pay $304 million (or $1.02 per share) for the CLEC. Covad CEO Charles Hoffman waxes optimistic in the company press release: Platinum's approach will bolster the successful execution of Covad's business strategy while providing the resources and support necessary for sustained growth. We believe that the resulting increased market competitiveness, improved capital structure, and enhanced product and network capabilities best position our customers, partners, and employees for the future. The deal, barring regulatory approval, should close in the second quarter of next year.
Related:- Covad Nudging Way Into Wireless
- Covad Standalone ADSL2+: June 1?
- Sonic.net's New CLEC Venture
- Covad ADSL2+ Now Available
- SCOTUS Throws Out Baby Bell Antitrust Case
- Covad Cutting 8% of Workforce
- Sonic.Net Builds Out Their Own Network
- Vonage To Resell Covad DSL
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kapil
The Kapil
join:2000-04-26
Chicago, IL
| Platinum got a good deal! ...Covad's share price crashed after the telecom bust a few years ago and never recovered. If you add up all the equipment Covad owns and all the licenses/regulatory approvals to do business in all the states as a CLEC....Covad is a gold mine and the buyer got a hell of a deal!
The challenge, of course, remains, to turn a profit in the artificial market conditions created by the ILEC/Cable duopoly and their deep pockets. ...but Covad made it this long on its own, despite all odds, and has a better fighting chance with a new owner with a little bit of cash.
This company has nine lives and I hope it keeps fighting the good fight.
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»PropertyMaps.com - Real-time, map based, nationwide MLS property search! | |
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FAMILY2
@mindspring.com | will Platinum take it private or keep it on the AMEX | |
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inteller
Sociopaths always win.
join:2003-12-08
Tulsa, OK | well there goes covad. private equity funds do one thing, buy a company to make money then sell it off in pieces. | |
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LiamJunket
Premium
join:2002-03-03
Ocean City, NJ
 ·Comcast
| Re: well there goes covad. said by inteller :private equity funds do one thing, buy a company to make money then sell it off in pieces. And who are they going to sell off the pieces to? Nobody will want them. Maybe scrap dealers will buy some old equipment. | |
| | jester121
join:2003-08-09
Lake Zurich, IL | That's the best possible outcome for Covad, they're pretty dysfunctional. | |
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burgermeister
All Computers Are Junk
join:2000-10-23
Utica, MI | If incompetence were a crime, Hoffman would be in jail. Instead he probably made a good deal of money off this buyout. | |
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calvoiper
join:2003-03-31
Belvedere Tiburon, CA
| Re: If incompetence were a crime, Hoffman would be in jail. Maybe you think Hoffman is incompetent, but originally there were three companies that jumped into DSL in a big way: Covad, Rhythms, and NorthPoint. Only Covad survives. The others went the bankruptcy/acquisition route.
calvoiper
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VoIP--the death knell of remaining voice monopolies! | |
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sporkme
drop the crantini and move it, sister
Premium,MVM
join:2000-07-01
Morristown, NJ
·Optimum Online
| Re: If incompetence were a crime, Hoffman would be in jail. said by calvoiper :Maybe you think Hoffman is incompetent, but originally there were three companies that jumped into DSL in a big way: Covad, Rhythms, and NorthPoint. Only Covad survives. The others went the bankruptcy/acquisition route. Covad did go bankrupt. They got rid of their debt, yet still manage to bleed money every quarter... Terrible managment + ILEC scheming. | |
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calvoiper
join:2003-03-31
Belvedere Tiburon, CA
| Re: If incompetence were a crime, Hoffman would be in jail. My point was that Covad has maintained (and, with its new owners, continues to maintain) its independence, unlike, say, NorthPoint, which fell into the ATT maw years ago....
calvoiper
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VoIP--the death knell of remaining voice monopolies! | |
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burgermeister
All Computers Are Junk
join:2000-10-23
Utica, MI
| Re: If incompetence were a crime, Hoffman would be in jail. Regardless, the stock holders get screwed (big time) and I'm sure Covad management will come out smelling like a rose.
Back when Covad stock was over 2.00, Hoffman said there was no way they were going to sell at those prices and than he goes ahead and sells for less than half that. LOL, I guess he didn't sell at those prices. 
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"I've learned that depression is merely anger without enthusiasm." | |
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HoffmanStinks
@piczo.com
| Amen brother. I worked at Covad from 2000-2004 and the incompetence of the mgmt team and board is borderline criminal. The fact that Hoffman is likely to make out with $2-$5 million from equity and incentives for driving a company into the ground just steams me. He should have been fired years ago yet here he sits. | |
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istart
@army.mil
| ManagementNetworkEquipment I worked as a xDSL and VoIP technician for Covad from 2000-2005. Covad has management visibility into just about every CO Covad has equipment. Lots of money tied up in equipment to offer the customer QOS. Covad has excellent teaming relationships with partners also! This acquisition for PE is a steal!! | |
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inteller
Sociopaths always win.
join:2003-12-08
Tulsa, OK | so marks the end of covad. investment groups do one thing, buy and sell for a profit. covad will be pieced out to the highest bidder(s). | |
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CylonRed
Premium,MVM
join:2000-07-06
Bloom County
 ·Speakeasy
| While I don't see the new company... making money, I sure hope they find a way rather than being sold in pieces. I love my Covad line (via SE) and if they go out - I might not be able to keep SE (which has been rock solid stable for many years)...
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Brian
Free health care is 100% a misnomer - it is not free and never will be free. | |
| | | | | kingofdsl
join:2002-12-11
Afton, OK | Re: While I don't see the new company... Everyone at Covad should leave immediately.
Company I was working at got bought out by Platinum in September and I was dumped within a month. | |
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fatness
subtle
Janitor
join:2000-11-17
fishing | Re: While I don't see the new company... What company was that? | |
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sporkme
drop the crantini and move it, sister
Premium,MVM
join:2000-07-01
Morristown, NJ
·Optimum Online
| Re: While I don't see the new company... said by fatness :What company was that? Someone with much more time on their hands could peruse this list and see what became of these companies:
»www.platinumequity.com/site/acti···rtfolio/
I know USR, they turned into a turd after 3Com bought them. | |
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XBL2009
------
join:2001-01-03
Chicago, IL
·AT&T Midwest
| Telcom in America is a complete sham. How else can companies like AT&T and Comcast stay in business. They simply bribe and lobby politicians to death.
If Google and Microsoft don't succeed in building a nationwide wireless system we will all be stuck with the old model that just doesn't work anymore. | |
| | 
DSLTech
join:2000-12-30
San Jose, CA
| still needs approval, etc also wont be done until Q2 2008.
at this point the only thing that could go wrong is frantic customers jumping ship.
of course shareholders will be pissed but $1.02 is better than $0.70; the market never was able to see covad's value, so going private is great. | |
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Another Private equity firm...
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