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Paetec aquistion of Caviler final

December 08, 2010

Paetec Holding Corp. completed its acquisition of Virginia-based Cavalier Telephone Corp., Paetec officials said Monday.

Citing Cavalier's mix of consumer and business accounts, analysts have been skeptical of the acquisition. Paetec officials have maintained that any downsides would be far outweighed by the benefits brought by 16,600 route-mile fiber-optic network that comes with the deal.

The closing comes 12 weeks after Paetec announced the $460 million cash deal six days after Paetec completed a $450 million bond offering to help finance the transaction. Due in 2018, the bonds bear an aggregate 9.875 percent interest rate.

"We are very pleased to close this acquisition...less than three months from signing the definitive agreement," Paetec chairman and CEO Arunas Chesonis said in a statement. "Over the summer, we developed a dedicated cross-functional M&A team to facilitate the complex merger issues. That team, along with the diligent efforts of our regulatory, legal and financial staff, made this a dramatically quicker process."

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