January 6, 2010

Conterra Ultra Broadband Raises $25M

Conterra Ultra Broadband Holdings, Inc. today announced completion of a $25 million senior preferred stock offering led by The Goldman Sachs Group, Inc. Other investors were The Circumference Group, LLC, an Arkansas based advisory and investment firm comprised of former Alltel Wireless corporate executives, and Conterra's Chairman and CEO, Stephen Leeolou. Proceeds from the offering will be used to fund new network deployments that will enable Conterra to provide high-speed broadband transport services to its growing base of wireless carrier, education, healthcare and government customers primarily in rural, underserved regions of the United States.

"The addition of this substantial equity capital strengthens our balance sheet and will allow us to continue to aggressively rollout our hybrid, fiber/microwave, video, data and voice transport networks in virtually any location on a nationwide scale," noted Mr. Leeolou. "In addition to their investment, we believe that Goldman Sachs' and Circumference Group's insights and corporate development experience in the telecom industry will also add value to our company," added Mr. Leeolou.

"We believe the U.S. broadband market is poised for strong growth over the next several years and that Conterra is well positioned, with the right management team, target markets and service offerings to participate in this growth," commented Peter Perrone, Managing Director, Goldman Sachs. "Providing high-capacity mid-mile and last-mile transport connections in parts of the country that have traditionally lacked adequate broadband infrastructure is an attractive business opportunity," added Mr. Perrone. Goldman Sachs joins Duke Energy Corp. and GE Capital as Conterra's largest institutional equity investors. The company also continues to have access to its $40-million dollar senior credit facility provided by a multi-billion-dollar, U.S. based investment fund.

As a result of this $25 million preferred equity transaction, Mr. Perrone and Circumference's Christopher Smith, former Executive Vice President, Network Services of Alltel Wireless (acquired by Verizon Wireless for more than $28 billion), will join Conterra's five-member Board of Directors. Richard Bates, Vice President, Mergers and Acquisitions for Duke Energy, will also join the Board and Mr. Leeolou will continue to serve as its Chairman.

The Little Rock, Arkansas investment banking firm of Stephens Inc. served as financial advisor to Conterra on this transaction and corporate legal services were provided by McGuireWoods LLP in Charlotte, N.C. Goldman Sachs was represented by Wilson Sonsini Goodrich and Rosati, P.C. in Palo Alto, CA.

About Conterra: Conterra Ultra Broadband Holdings, Inc. is a privately held, alternative access transport carrier that, through its subsidiaries, provides managed, fiber-class broadband solutions to approximately 1,000 commercial sites in 17 states supporting customers in the wireless mobility, K-12 school, healthcare and government sectors.

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