Privately-held optical Internet service provider Cogent Communications Group, Inc., has been approved for listing on the American Stock Exchange. The Exchange's approval remains subject to certain conditions, including the successful completion of Cogent's acquisition of Allied Riser Communications Corp. (Quote).
The Washington, D.C.-based Cogent expects to complete its Allied Riser deal today, at which time it expects it will meet the Exchange's conditions for listing. Once listed on the AMEX, Cogent will trade under the symbol COI.
The Exchange's Committee on Securities determined, due to a number of factors, including Cogent's compliance with all other applicable guidelines, that Cogent substantially complies with the applicable listing eligibility guidelines and should be approved for listing even though it does not fully meet the $15 million guideline for market value of public float based on the current market value of Allied Riser's public float.
On August 29, Cogent announced it had entered into a definitive agreement for the acquisition of Allied Riser, a Dallas-based provider of data communications services in commercial office buildings across the U.S. and in Canada. Terms of the transaction were not disclosed.
In the transaction, Allied Riser will become a wholly-owned subsidiary of Cogent and its in-building networks will be added to Cogent's national backbone and facilities. Holders of ARC common stock will receive shares of Cogent common stock in the merger. ARC's convertible subordinated notes will become convertible into Cogent common stock following completion of the merger.
Primarily servicing small and mid-sized business, Allied Riser has struggled in the recent telecom slump and has suffered through a large number of layoffs. At the market close on Monday, the company's stock was trading at 19 cents a share with a 52-week high of $4.50 a share.
At the time of the August deal, Dave Schaeffer, chief executive officer of Cogent, said, "The acquisition of ARC will allow Cogent to integrate the nation's largest 80 Gigabit per second IP Internet backbone with the premier in-building network serving over 310 million square feet of large multi-tenant office buildings. Cogent will be uniquely capable of providing cost-effective Ethernet Internet access to small and medium size businesses in major metropolitan markets."
Jerry Dinsmore, president and chief executive officer of ARC, added, "ARC believes that the combined companies are financially stronger than each company alone and the combination of ARC with Cogent will provide synergies for both companies and is a logical extension of ARC's wholesale strategy."
Cogent delivers ultra-high speed Internet access and transport services to businesses in the multi-tenant marketplace and to service providers located in major metropolitan areas throughout the United States. Cogent's signature service offered to commercial end-users of 100 Mbps for $1,000, offers 100 times the observed bandwidth of a T-1 connection at two-thirds of the cost.
Cogent's network consists of a dedicated nationwide multiple OC-192 fiber backbone, multiple intra-city OC-48 fiber rings, and optically-interfaced high-speed routers. Cogent is currently servicing 20 metropolitan markets.
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