Canadian Company to Buy Bankrupt Viasource's Assets4/14/2002 8:00 PM Eastern
A Canadian telecommunications-services company has purchased the assets of Viasource Communications Inc. from a U.S. Bankruptcy Court, ending about five months of uncertainty for the cable and telephone installation-services provider.
180 Telecommunications Inc. — an Ontario-based startup — bought Viasource's assets for $60 million to $65 million, said 180 Telecommunications CEO Barry Simons.
When Viasource filed for bankruptcy protection in November, it listed assets of $148.9 million and liabilities of $59.9 million. More than half the assets were goodwill and other intangibles.
Simons said his company has received judicial approval for the purchase and expects to close the deal between April 12 and April 19.
Once the deal closes, Viasource will change its name to 180 Telecommunications, Simons added.
180 Telecommunications is essentially an investment vehicle for the Viasource purchase, said Simons, who added that several investors have put up the money for the acquisition.
"We've got private individuals as well as large institutional investors," Simons said.
One of those institutions is GE Capital Corp., also one of Viasource's largest creditors.
Once the deal closes, 180 Telecommunications will focus on residential high-speed data installations for its MSO clients, said Simons. The company will concentrate on the cable industry, he added.
"The core competency will be working for cable," Simons said. "That's what we'll be spending most of our time on here."
One area that the new company will stay away from is digital subscriber line installations, a past practice that helped lead to Viasource's downfall.
Viasource had planned to roll up installation contractors across the country and completed an initial public offering in 1999. But the offering price of its stock — $8 per share — was far below the $14 to $16 per share the company had hoped to attract.
Viasource raised about $37 million through the IPO. And though the company was able to complete a few small deals, Viasource began running out of money soon afterwards. In its most recent financial report, the company pegged its cumulative losses at more than $170 million.
In its bankruptcy filing, Viasource cited the slowing economy and the demise of many customers, including several DSL service providers and competitive local-exchange carriers.
While 180 Telecommunications has no operations of its own, Simons controls other entities that provide telecom installation services in Las Vegas; Charlotte, N.C., and Toronto.
Viasource has operations in about 81 U.S. cities.
Viasource had been doing work with several major MSOs — such as AT&T Broadband, Cablevision Systems Corp., Cox Communications Inc., Adelphia Communications Corp. and AOL Time Warner Inc. — and Simons said he plans to continue those relationships.
"They [MSOs] have stuck with [Viasource] through Chapter 11," Simons said. "We have to make them delighted."
The new company will focus on increasing its share of the overall telecom installation market, which he estimated to be worth between $2 billion to $3 billion annually, he added. With Viasource's sales topping out last year at about $100 million, "that's not exactly market share," he said.