Broadweave buys 2 iProvo providers
But some City Council members say they haven't seen enough information, or had enough questions answered, to give their blessing to the pending $40.6 million sale of the city-owned fiber optic network, which provides Internet, phone and video services to Provo residents.
"I'm not ready to vote for it or against it," City Councilwoman Sherrie Hall Everett said.
In a highly anticipated announcement, Broadweave executives said Friday they've reached agreements with Mstar Metro and Nuvont Communication to acquire and service the companies' Provo-based customers. The company will also acquire Veracity Communications in a cash and stock transaction. Steve Christensen, CEO of Broadweave, said the strategy will cut down on inefficiencies inherent in the wholesale model and bind up a network that's cost the city millions of dollars over the years.
"It's bleeding," Christensen said. "It's bleeding profusely."
Under the terms of the agreement, Broadweave and Veracity will merge operations. Two of Veracity's owners will join the executive ranks at Broadweave. Kevin Mayberry will become a member of Broadweave's board of directors and Veracity President Drew Peterson will become Broadweave chief of sales officer.
Christensen said they came across Veracity, which provides voice and data services to 3,000 customers over iProvo and Qwest, and they were impressed with the company. Veracity is the only service provider on iProvo that turned a 200 percent positive cash flow while the network struggled.
Initially, Veracity executives Drew Peterson and Kevin Mayberry hoped to continue to be providers on the iProvo network, but said they were surprised when Broadweave made them an offer they couldn't refuse.
"Sometimes, when you're not looking, the best opportunities present themselves," Peterson said.
Broadweave and Veracity executives declined to discuss the exact amount of the transaction in cash and stock. Christensen said there will be no layoffs for any of Veracity's 45 employees.
Frazer Bullock, one member of Broadweave's board of directors, said this business transaction will allow iProvo to cut the inefficiencies to increase competition with Comcast and Qwest.
"It provides another network that is viable in the long-term," he said.
But not everyone is content with the news they received at the announcement.
Recent comments
How did Broadweave get this deal w/out a number of bids from qualified...
muniwatcher | May 27, 2008 at 3:13 p.m.
This turn of events is just following the long-term pattern of iProvo...
Concerned | May 20, 2008 at 9:59 a.m.
If the city is set on selling the network, or even bringing on a...
Unhappy in Provo | May 18, 2008 at 6:50 p.m.
