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Paetec to Buy Cavalier Telephone for $460M

Paetec agreed to acquire Cavalier Telephone in an all-cash, $460 million transaction, adding nearly 17,000 fiber-route miles to Paetec 's existing service footprint.
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NEW YORK (TheStreet) -- Paetec (PAET) agreed to acquire Cavalier Telephone in a $460 million, all-cash transaction, adding nearly 17,000 fiber-route miles to Paetec 's existing service footprint.

The combined company would have generated about $1.95 billion in revenue and $381 million in adjusted earnings before interest, taxes, depreciation and amortizatino for the 12 months ended June 30, 2010, on a pro forma basis, including $30 million in expected run-rate synergies in year two and annually thereafter, Paetec said.

After the transaction closes, Paetec expects to have a local presence in 86 of the top 100 metropolitan statistical areas and a presence in 1,178 collocations, or an increase in collocations of 95% as a result of the acquisition.

Cavalier is a privately held company whose majority owner is private-equity firm

M/C Venture Partners

. Its wholly owned subsidiary, Intellifiber Networks, is one of the largest network providers in the nation, according to Paetec.

-- Written by Andrea Tse in New York.

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