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Cogent Acquires Broadband Company

Deal Expands Customer Base

By Yuki Noguchi
Washington Post Staff Writer
Monday, October 25, 2004; Page E05

Cogent Communications Group Inc. of Georgetown plans to announce today that it acquired the assets of another telecommunications firm and will get a new investment of $18 million in cash as part of the merger, according to the company. .

Cogent, which sells Internet service to small and medium-size businesses, bought the assets of Chantilly-based Aleron Broadband Services, also known as Aegis Internet, for an undisclosed amount. With the acquisition, a group of private equity investors led by Columbia Ventures Corp., will invest $18 million. The company will add about 100 business customers and 25 employees.

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Columbia Ventures, based in Vancouver, Wash., was an investor in privately held Aegis, and will take a seat on Cogent's board of directors.

Aegis is the sixth company Cogent bought this year as it tries to increase its customer base and sales, which have lagged in a difficult market for telecommunications. Earlier this year, it bought LambdaNet Spain, LambdaNet France, Carrier1, Unlimited Fiber Optics and Global Access. Cogent, which has been in business since 2000, also purchased the assets of Internet pioneer PSINet Inc. in 2002.

"By acquiring assets at cents on the dollar, Cogent continues to add a significant number of customers and bring those customers onto our network," said David Schaeffer, chief executive of Cogent.

Cogent has not shown big revenue growth this year, despite its acquisitions, in part because the company had focused on buying infrastructure instead of customers, Schaeffer said. Now it's looking for companies with customers, instead of network, he said. Revenue in the second quarter was $20.4 million, down from $21 million in the first quarter. In the second quarter last year, revenue was $15.5 million.


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