Another communications company has gone private, as Platinum Equity Parters enters and agreement to acquire voice and data provider Covad for $304 million (PDF).
Covad is based in San Jose, California, and provides broadband and VoIP services, mainly to small and medium-sized businesses. Covad says there will be no immediate changes in service for customers, and the acquisition will give the company the ability to invest in growth strategies which will bring the company into profitability. Although Covad was able to weather the first dot-com blowout, the company cut about 8 percent of its staff in June as part of a restructuring which also took $1.5 million off the company’s bottom line for the quarter.
The acquisition is another example of a communications company switching from a publicly-traded enterprise to a privately-held operation. In June, private equity firms spent $8.2 billion to acquire Lucent spin-off Avaya, and TPG Capital and Goldman Sachs purchasing Alltel Corp. in May of this year for $27.5 billion.
