Possibly, but if DataFlo was in distress then why would Covad want to buy
them? Could have been DataFlow's HUB locations and existing foothold in a
market etc.
Covad certainly has the ability to buy profitable operations. As crappy as
1.4x revenue sounds to people that are making a substantial profit in this
industry it may have been the deal of the century for DataFlo. They might
have just been breaking even etc. Revenue doesn't say much of anything
about a company IMO. Bottom line profits are all that really matter.
Best,
Brad
-Original Message-
From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On
Behalf Of Tom DeReggi
Sent: Saturday, October 14, 2006 9:54 PM
To: WISPA General List
Subject: Re: [WISPA] Covad Expands Broadband Wireless Network
WithDataFloAcquisition
Which sounds like to me, DataFlow was in a distressed state, doing a
firesale..
Tom DeReggi
RapidDSL Wireless, Inc
IntAirNet- Fixed Wireless Broadband
- Original Message -
From: Matt Liotta [EMAIL PROTECTED]
To: [EMAIL PROTECTED]; WISPA General List wireless@wispa.org
Sent: Friday, October 13, 2006 11:04 AM
Subject: Re: [WISPA] Covad Expands Broadband Wireless Network With
DataFloAcquisition
Does anyone know anything about DataFlo? According to the press release it
appears they were bought for 1.4x revenue, which seems awfully cheap.
-Matt
Peter R. wrote:
Covad Communications Group Inc. announced it will acquire the assets of
DataFlo Communications LLC, a Chicago-based broadband wireless provider,
adding a sixth market to its coverage area.
Covad will acquire substantially all the assets of DataFlo for
approximately $1.4 million in cash. For the full 2006 year, DataFlo
expects to generate approximately $1 million in revenue. In keeping with
Covad's profitability goals, the transaction is EBITDA accretive. The
transaction is expected to close later this month subject to customary
closing conditions and regulatory approvals.
Covad already offers broadband wireless to Los Angeles, San Diego, San
Francisco, Orange County and Las Vegas through its wireless subsidiary
NextWeb, which it acquired earlier this year.
Speaking at the Internet Telephony Conference Expo today, Claude
Tolbert, Covad's senior vice president of product solutions planning and
priorities, said the acquisition of NextWeb was primarily in response to
regulatory uncertainty over the company's access to incumbent broadband
networks. With that concern ameliorated, he said, the DataFlo deal is
more of a continuation of an overlay network strategy.
Broadband wireless allows the company to provide higher-capacity
services. It can offer 100mbps on unlicensed band and 10mbps on licensed
bands - speeds unavailable with DSL. Broadband wireless also enables
Covad to turn up services more quickly, reducing intervals from 25 days
for wireline to 10 days for wireless. It also enables the company to
serve clientele with temporary needs.
Tolbert said the DataFlo network is pre-WiMAX and serves businesses via a
direct sales force. This distribution strategy, he added, will help Covad
to balance its predominantly wholesale focus.
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