Birch Communications Announces Acquisition of Cleartel Communications' Customer and Network Assets

7th acquisition adds 100,000 access lines & all-digital network in Florida!

ATLANTA, May 12 /PRNewswire/ -- Birch Communications, a leading provider of telecom services in the United States, announced today it has signed a definitive agreement to acquire substantially all of the customers and network assets of Cleartel Communications, Inc., a leading provider of voice and data telecommunications solutions. Included in the acquisition are approximately 100,000 business and residential access lines as well as a state-of-the-art facilities network in Florida.

"Acquiring the Cleartel assets further advances Birch's corporate strategy to strengthen and expand our business, as well as our IP-based voice and data network, via tuck-in, synergistic acquisitions," said Vincent M. Oddo, Birch president and CEO. "This is our seventh strategic acquisition during the past three years and each one has significantly increased customer density in our 31 state service footprint."

"Through each acquisition, Birch has proven its ability to seamlessly integrate acquired customers and network into its current business. As a result, we have been able to enhance the service experience and product offerings for acquired customers while creating significant additional positive cash flow for the company," said Edward James, Birch CFO. "We look forward to enhancing the Customer Experience as well as stakeholder value in the same manner with this highly-accretive transaction."

Throughout its 13 year history, Birch has built an unparalleled reputation for delivering great service to small and medium sized businesses with a very strong commitment to customer satisfaction. "We're very excited to welcome the Cleartel customers into our Birch family knowing that they will immediately benefit from our dedication to providing award-winning, superior customer care," said Christopher Aversano, Birch COO.

This acquisition significantly strengthens and accelerates Birch's market position as one of the largest competitive communications companies in the United States, making Birch the premier alternative to the legacy carriers for small and medium sized business customers. The additional density and network will also allow Birch to offer its new customers an even wider array of reliable local voice and high speed Internet services, including DSL, ADSL 2+ and T-1 services, at very affordable prices.

Terms of the transaction were not disclosed. The transaction is expected to close in the third quarter of 2009 and is subject to, among other conditions, receipt of approvals of the FCC and 22 applicable state regulatory authorities as well as other customary conditions precedent. Redwood Capital Group acted as exclusive financial advisor to Birch in connection with the transaction.

Cleartel is majority owned and controlled by MCG Capital Corporation (Nasdaq: MCGC), a solutions-focused commercial finance company providing capital and advisory services to middle-market companies throughout the United States. The Bank Street Group LLC served as exclusive financial advisor to Cleartel and MCG in connection with this transaction.

About Birch Communications

Headquartered in Atlanta GA, Birch Communications is one of the largest competitive local exchange carriers in its 31-state Southeast, Southwest and Midwest regions serving small- and medium-sized business customers. Birch was the first in its class to deploy its own private IP network utilizing soft switch technology to deliver innovative, high quality, affordable voice and broadband communications services to small and medium sized business customers. Please visit www.birch.com for more information.

About Cleartel Communications

Cleartel Communications, Inc., is a leading integrated telecommunications provider offering a diverse menu of voice, data, and Internet services, as well as other customized services and solutions to both consumer and business accounts in over 20 states. Cleartel services southeast Florida via its facilities-based network, which includes multiple class 5 switching facilities offering voice and data T-1's over a state-of-the-art optical fiber network. The Company also offers pre-paid home telephone services via the brand name NOW Communications. Cleartel provides superior service along with real savings to its customer base. Cleartel Communications, Inc. is headquartered in Delray Beach, FL, with offices in Orlando, FL and Hollywood, FL. For more information on Cleartel Communications, please visit www.cleartel.com or call 1-888-389-1400.

About Redwood Capital Group

Redwood Capital Group is an investment banking firm serving the technology, communications and media & business services industries. The firm focuses on mergers & acquisitions, debt and equity financings and financial advisory services for its clients worldwide. Please visit www.redcapgroup.com for more information.

About Bank Street

Bank Street is an independent investment banking firm providing a comprehensive array of financial advisory services to middle-market companies. With a portfolio of capabilities that includes Financial Advisory, Mergers & Acquisitions, Private Placements of Debt & Equity, Restructuring and Turnaround Advisory, Valuation and Fairness Opinions, Bank Street offers one-stop shopping for our clients seeking sophisticated financial services. Please visit www.bankstreet.com for more information.

SOURCE Birch Communications



RELATED LINKS
http://www.birch.com
http://www.cleartel.com
http://www.redcapgroup.com
http://www.bankstreet.com

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