PAETEC Buys Allworx on Heels of McLeodUSA Deal

About a month after announcing the acquisition of McLeodUSA Inc., PAETEC Holding Corp. said it also will buy equipment maker Allworx Corp.

PAETEC will pay $25 million in cash. Allworx will become a PAETEC subsidiary.

SMBs make up a large part of McLeodUSAs customer base. PAETEC is more accustomed to selling to enterprises. By adding Allworx to its holdings, PAETEC will be primed to serve SMBs. Allworx specializes in integrated PBX/Key telephone and network systems, and VoIP phones. It also develops software for conference calling, call queuing and other tasks,

Allworx sells through VARs, and PAETEC will keep that distribution channel. It also will sell Allworx products through its agents.

PAETEC also owns Equipment Solutions, an Avaya and Cisco reseller that distributes to medium and large businesses as well as enterprises.

The Allworx deal should close this month.

PAETEC last year bought US LEC Corp., a CLEC with a more southeastern footprint than the New York-based carrier. Then, Sept. 17, PAETEC said it was buying Iowa-based McLeodUSA for $565 million in an all-stock, tax-free transaction. The move gives PAETEC nationwide coverage, even though it still has to rely on Bell last mile access in many places.

Allworx Corp. www.allworxcorp.com
PAETEC Holding Corp. www.paetec.com