Access, Birch Sign Merger Deal

Access Integrated Networks Inc. said today it will merge with twice-bankrupt Birch Telecom Inc.

Terms of the deal were not disclosed. However, the privately held CLECs which both run agent programs said their combined annual revenue will total $200 million. They also said they will have more than 300,000 voice and data lines, 100,000 SMB customers and 400 employees.

Vincent Oddo, president and CEO of Atlanta-based Access, will retain that role.

Stephen Dubé, who has served as head of Birch since April 2006, will return to CXO LLC, the Dallas-based management consulting firm that has advised Birchs senior lenders. Dubé had replaced Greg Lawhon after Birch emerged from its second bankruptcy. Lawhon had worked for Birch since its inception in 1997 and essentially was pushed into the CEO role when the company filed for bankruptcy in August 2005.

On Friday, Dubé said Birch now is profitable and debt-free and that Access has ambitious growth plans.

We believe this combination with Access is in the best interest of our customers, employees and shareholders, he said in a news release.

Oddo said Access and Birch have overlapping markets but that the merger also gives Access a footprint in Kansas, Missouri, Oklahoma and Texas.

Birch first filed for Chapter 11 reorganization in 2002. It filed again three years later after the FCC did away with UNE regulations. Birch had built its business model on the ability to access LEC networks but since, like Access, has worked to becomes facilities-based.

Access was founded in 1996 and serves nine southeastern states. Early last year, it bought 43,000 local access lines from embattled and now Platinum Equity-owned Trinsic Inc. Those lines represented nearly all of Trinsics residential and SMB lines in Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina and Tennessee.

The transaction is expected to close early next year. Redwood Capital Group acted as financial advisor to Access while FTI Capital Advisors advised Birch Telecom. Birchs legal advisor was Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C. Jones Day served as legal adviser for Access.

Access Integrated Networks www.accesscomm.com
Birch Telecom www.birch.com
FTI Capital Advisors www.fticme.com
Redwood Capital Group www.redcapgroup.com