Eschelon Telecom, Inc. Announces Completion of $3 Million Financing

HostReview.com
Monday, January 6, 2003; 12:00 AM

MINNEAPOLIS, Jan 6, 2003 (BUSINESS WIRE) -- Eschelon Telecom, Inc., an Integrated Communications Provider of voice, data, Internet services and business telephone systems, announced today that it has closed new equity investments of $3 million. This additional round of financing brings Eschelon's total funding raised in 2002 to $50 million. The proceeds of the financing will be used for general business purposes.

The $3 million round of financing closed on December 23, 2002 and was invested by Wind Point Partners, Stolberg Equity Partners and minority investors. Earlier in 2002, Eschelon raised $47 million from Bain Capital, Wind Point Partners, Stolberg Equity Partners, General Electric Capital Corporation and several other minority investors.

"Raising private equity is difficult in today's market, especially for telecom companies," stated Richard A. Smith, Eschelon's President and Chief Operating Officer. "Eschelon received additional funding because we have a proven track record for business plan execution, we achieved EBITDA (earnings before interest, taxes, depreciation and amortization) positive status in August, 2002, and we've achieved the necessary scale with $120 million in revenue, over 150,000 access lines and more than 35,000 business customers."

"Eschelon is one of the few telecom success stories of the year. Eschelon's business model has been in place for over 6 1/2 years and is achieving excellent operating results," stated Peter Van Genderen, Managing Partner of Stolberg Equity Partners. "For a telecom company to show continued growth over its history is outstanding and we are impressed by their ability to perform well in the midst of economic and industry challenges."

"Our solid financial stability ensures that we will be around to serve our customers as they grow," stated Cliff Williams, Eschelon's Chairman and CEO. "With the current uncertainty in the telecom market, we remain committed to providing our customers high-quality telecommunications services that will serve them long-term combined with unparalleled customer service."

Eschelon Telecom, Inc. was founded in 1996 and is a rapidly-growing provider of integrated voice, data and Internet services. The company offers small and medium sized businesses a comprehensive line of telecommunications and Internet products including local lines, long distance, business telephone systems, DSL, T-1, network solutions and Web hosting. Eschelon employs more than 900 telecommunications/Internet professionals and currently provides service to more than 35,000 business customers in Minnesota, Arizona, Utah, Washington, Oregon, Colorado and Nevada. For more information, please visit our Web site at www.eschelon.com.

For more info: Eschelon Telecom, Inc., Minneapolis Jenna Soule, 612/436-6426