May 20, 2008

Broadweave Buys iProvo Customer Base from Retailers

Broadweave Networks has reached separate agreements to acquire and service the Provo-based customers of both Mstar Metro and Nuvont Communications. The agreements between Broadweave and the providers make further provision for a smooth transition to ensure a high level of customer satisfaction. The actual transition of customers will coincide with Broadweave’s acquisition of the iProvo network which is expected to close before July 1, 2008.

Mstar and Nuvont serve customers on the iProvo fiber-optic network. Those customers will remain on the iProvo network, but the agreements between those providers and Broadweave makes provision for those customers to be served by Broadweave. The companies are committed to making the move as seamless as possible.

Historically, the iProvo network has been a wholesale network because the City has been legally prohibited from becoming the service provider on its own network. Consequently, the city pursued a model in which service providers would pay iProvo to run services over the network to customers. However, under the terms of Broadweave’s acquisition of the iProvo network, Broadweave will become both network owner and service provider. The acquisitions today show Broadweave’s commitment to invest in the iProvo network and Broadweave’s ability to bring its financial resources to the entire solution.

Broadweave Networks and Veracity Communications also announced an agreement in which Broadweave will acquire Veracity in a cash and stock transaction. Under the terms of the acquisition, Broadweave and Veracity will merge operations and combine companies.

When Broadweave made the decision to purchase the iProvo network, we realized the network was not reaching its true potential for achieving a high take rate among business customers, Christensen noted. Broadweave set out to address that issue and discovered Veracity in that process.

Veracity delivers voice and data services over Utah’s iProvo network and over Qwest’s network. Veracity’s clients include notables such as Brigham Young University, Mountain America Credit Union, and RC Willey. Veracity is rare among service providers on the iProvo network because the company is cash flow positive and is growing at an annual rate of about 200 percent.


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