Cogent acquires troubled broadband provider

Metropolitan Ethernet provider Cogent Communications this week reached an agreement to purchase multitenant unit broadband provider Allied Riser Communications.

ARC will become a subsidiary of Cogent, and ARC's in-building networks and customers will now be tied to Cogent's national backbone.

ARC, which serves about 900 office buildings, has laid off approximately 75% of its workforce in the past month. In July, the provider revealed it will be cutting connections to 71 of its buildings by Sept. 24.

Specific terms of the deal were not disclosed, although it is an all-stock transaction that will see ARC common shareholders receive shares in Cogent as compensation.

In its latest quarter, ARC logged a net loss of more than $291 million, including $262 million in write-downs. ARC's stock price ended yesterday at 21 cents, well off its 52-week high of $8.87. Cogent is not yet a publicly traded company.

Cogent is at www.cogentco.com

Contact Senior Writer Michael Martin

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