Boston, MA 04/21/2014 (wallstreetpr) – Cbeyond, Inc. (NASDAQ:CBEY) is a $302 million company that provides communication services to small and medium-size businesses. The company is based in Atlanta.
Over the past six months, the board of directors of Cbeyond was involved in a strategic review of the company’s operations. The review process looked into various alternatives to make the company more valuable to shareholders. After evaluation, the board of directors determined that the interest of shareholders was best served through an all-cash sale of the company at a premium price.
According to the company’s CEO James Geiger, stockholder value will be maximized in the deal with the privately held Birch Communications Inc that agreed to buy Cbeyond for $323 million. The deal is all cash. Shareholders could receive a cash payment between $9.97 and $10 per share under the deal.
The lower-end of the price range represents about 41 percent premium over the company’s previous closing price.
Shareholder value
A strategic review of the operations of Cbeyond, Inc. (NASDAQ:CBEY) started last November with the aim of establishing the best way to create great value for the shareholders.
The news about the move to sell the company can be seen creating excitement in the stock in the current session as investors send the price soaring. In any case, the transaction provides a rare premium deal in the telecom industry.
The resulting company
After the close of the transaction, the resulting company from the combination of Cbeyond, Inc. (NASDAQ:CBEY) and Birch Communications will be a business entity with about $700 million a year in revenue, nationwide reach and about 200,000 in customer-base. The two companies are all based in Atlanta.
Expanding business
The move by Birch Communications to acquired Cbeyond is perfectly in-line with the company’s growth strategy. The company seeks to significantly expand through acquisitions. The acquisitions are expected to increase the company’s market share and revenue.
Birch Communications has acquired about 21 companies in recent years.
In the cutthroat telecoms business environment, size matters. For that reason, Birch Communications that serves businesses and individual customers can be seen investing massively in building a bigger size.
Closing the deal
The acquisition of Cbeyond is expected to close in about six months, the companies stated. The fact that the transaction promises a premium price on the shares of Cbeyond, Inc. (NASDAQ:CBEY) may be a catch for shareholders to approval the deal.
