MegaPath Focuses on Managed Services After Colo Business Sale

Telecommunications giant MegaPath plans to focus all of its resources to driving growth in the cloud and managed services markets. MegaPath this week sold its wholesale business and national colocation aggregation network to private equity firm Pivotal Group. Financial terms of the agreement were not disclosed.

The sale provides MegaPath with additional financial resources to support the rapid growth of its cloud and managed services businesses.

“[This] deal creates a more focused MegaPath, with increased access to capital to fund our strategic, high-growth, value-added services,” D. Craig Young, MegaPath’s executive chairman, said in a prepared statement. “MegaPath now has a greater capability to invest in a product growth strategy to meet the needs of our customers and partners.”

The acquisition is expected to be finalized by the end of the year, according to MegaPath.

Pivotal Group will merge the newly acquired MegaPath assets with connectivity-as-a-service provider Global Capacity, its wholly owned portfolio company.

MegaPath targets new managed services opportunities

MegaPath has offered voice, data and security services to small and medium-sized businesses (SMBs) and enterprises since 1996.

The company said it will maintain its voice network, multiprotocol label switching (MPLS) network and security network to support its cloud and managed services customers.

MegaPath also unveiled a unified communications (UC) service last month that could play an important role in the company’s future.

“A traditional calling solution is not enough for today’s fast-paced business environment. Today’s mobile and resource-challenged workers require more freedom and flexibility in how they communicate with their colleagues, teams, partners and customers,” MegaPath President Dan Foster said in a prepared statement. “MegaPath’s unified communications solution allows employees to easily and instantly connect and collaborate in a variety of ways from any device using their business VoIP number.”

Both the cloud and managed services markets is expected to grow over the next few years.

A July 2014 Oxford Economics survey of 350 U.S. business executives revealed nearly two-thirds of respondents said they believed their cloud services provider (CSP) adds significant value to their business results.

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