Allegiance acquires CPE businesses from WorldCom
Allegiance Telecom has purchased WorldCom’s customer premise equipment provisioning and maintenance businesses for a combined $30 million in cash.
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The transactions, which closed yesterday, gives the Dallas-based competitive local exchange carrier a CPE distribution business that operates in 34 markets and has more than 5000 customers and 7000 locations in the U.S. In addition, approximately 400 engineers will be transferred to Allegiance.
According to the company, business customers want the companies that provide and maintain their CPE to have a close working relationship with their communications service provider. With this purchase Allegiance is attempting meet that demand by turning itself into a single-source provider for the communications needs of small and medium-sized businesses.
“Acquiring a CPE business is something that any CLEC, at the point in their development where Allegiance is now, basically has to do,” said an Allegiance spokesman.
Combined, the units are expected to be accretive to earnings before interest, taxes, depreciation and amortization and to generate $30 million in revenue per quarter.
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