Speakeasy, Megapath and Covad to Merge

Speakeasy has entered into an agreement to combine its business with Covad Communications Co. and MegaPath Inc.—companies that are in the midst of merging themselves. The new entity is being billed as a “next-generation CLEC” which will focus largely on managed IP broadband services for businesses.

The transaction is expected to close in the third quarter of 2010, contingent upon closing of the previously announced merger between MegaPath and Covad. Financial terms will not be disclosed.

“The combination of Covad, MegaPath and Speakeasy will create the next-generation CLEC – an MSLEC that can offer customers and partners a full suite of managed IP broadband services and access over a powerful national network,” said D. Craig Young, MegaPath CEO. “With the additional resources, mature channels and enhancements to the service portfolio, we expect the combined companies to extend their leadership position in the SMB, enterprise and wholesale markets.”

Speakeasy boasts more than 30,000 small business customers nationwide. Best Buy acquired Speakeasy in 2007 and will continue to be a minority investor going forward.

“Covad’s intelligent broadband services platform and advanced network capabilities will provide an exceptional foundation for the collective product portfolios of Speakeasy and MegaPath,” said Pat Bennett, president and chief executive officer of Covad. “This combination of companies will make these services available to millions of small, medium and large business nationwide directly or through our wholesale partners.”

For more, see this press release.

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