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$30 Million for DSL.net
Deutsche Bank among institutional investors
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Business New Haven
7/25/2003
By: M.C.B.
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NEW HAVEN - DSL.net has closed a $30 million financing round with institutional investors led by Deutsche Bank, which will invest $22.5 million in the communications company. VantagePoint Venture Partners, one of DSL.net's current major institutional shareholders, is the other participant in the financing.
"This investment, led by such a prominent institutional investor as Deutsche Bank, further validates our belief that DSL.net is well-positioned to expand its business, generate cash flow and create significant value for its shareholders," said David F. Struwas, DSL.net's chairman and CEO.
"Being supported by a strong investor group, we intend to continue to grow our business both internally and through strategic acquisitions as we pursue our goal of being one of the clear winners in the consolidation of the business broadband sector," he added.
DSL.net said it would use the financing to become cash-flow positive based on its current plans and projections. The majority of the proceeds are expected to be used to accelerate the roll out of DSL.net's recently introduced integrated voice and data product offering over the company's broadband network in the mid-Atlantic and Northeast regions, fund strategic acquisitions and retire outstanding debt at a discount.
"We are extremely pleased to have secured $30 million to finance DSL.net's growth initiatives," said DSL.net Chief Financial Officer Robert J. DeSantis. "We believe DSL.net will continue to benefit from the growing demand for business-class broadband services and we welcome Deutsche Bank as an active supporter of the company. Adding Deutsche Bank to our already impressive group of institutional investors provides the company with another formidable financial partner."
The financing package includes $30 million of three-year senior secured notes, bearing interest at 1.23 percent annually, as well as warrants to purchase approximately 158 million shares of DSL.net common stock for 38 cents per share. The warrants are exercisable for three years.
Warrants to purchase approximately 13 million shares were issued in connection with the initial closing. Issuance of the remaining warrants is subject to stockholder approval. Stockholders holding sufficient shares to approve this issuance have committed to vote for approval.
DSL.net says it hopes to accelerate the rollout of integrated voice and data service offerings on SDSL and T-1 platforms in Washington, New York, Boston and parts of Connecticut, as well as to augment sales and marketing activities in conjunction with the new product offerings and market opportunities.
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