Home > News > Oct 2, 2007

Comtel Completes Asset Purchase of VarTec Telecom Unveiling New Strategy for Growth

Nationwide Carrier Will Operate Under the Name Excel® With New Focus on Wholesale Services for the Master Dealer and Reseller Channels

DALLAS - June 7, 2006 - Comtel Telcom Assets LP today announced that it has completed its asset acquisition of VarTec Telecom, Inc., a pioneer of the 10-10 dial-around communications market. The new company will operate under the name Excel Telecommunications and will be primarily focused on providing wholesale dedicated, switched and IP-based voice, wireless, data and enhanced services nationwide.

The new company’s launch marks the completed transfer of ownership to Comtel of substantially all of the assets of VarTec Telecom, Inc. and certain of its subsidiaries, including its sub-brands of Clear Choice Communications®, One Choice® and VarTec Solutions (formerly eMeritus Communications), as first announced in August, 2005. Comtel is primarily owned by Sowood Commodity Partners Fund III LP, which is managed by Boston-based investment manager Sowood Capital Management LP.

The new Excel CEO, James Cashiola, said the company will focus primarily on the Master Dealer, Reseller, CLEC and IXC business segments, but will continue to serve all existing residential and wireless customers, as well as handle all 10-10 dial-around activity, such as the 10-10-811® long distance product, and the affinity programs currently being offered under the VarTec® brands.

“The dynamics of the telecommunications industry are quickly evolving and will continue to do so. The ongoing consolidation of service providers through mega mergers, a progressive regulatory environment at the federal and state levels and the rapid adoption of IP-based technology collectively have created a new playing field on which the new Excel is now well-positioned to succeed,” Cashiola said.

“Building upon the assets of the former VarTec, including its extensive network and technological infrastructure, marketing expertise, superior customer service, and strong relationships with the reseller channels, gives us every reason to believe the new Excel will be well received in the marketplace,” Cashiola added. “Our focus on aggressive pricing and superior service will contribute to an unparalleled customer experience seldom evident elsewhere in the wholesale market.”

Cashiola noted the retention of the Excel® brand and its name recognition will help accelerate the company in the marketplace. “The Excel brand has a high level of awareness among the general public and industry peers. Leveraging that awareness, even with a shift in focus to the wholesale segment, will help the company reach its goals,” he said.

VarTec Telecom, Inc. purchased the domestic operations of Excelcom, Inc. and its wholly-owned subsidiaries, Excel Telecommunications, Inc., and Telco Communications Group, Inc., as well as eMeritus Communications, Inc. from Teleglobe Holdings (U.S.) Corporation in the spring of 2002.

The company’s expansion and investment in the commercial wholesale market will enable the new Excel to become a strategic partner to its dealers and resellers. The new Excel’s cost structure is among the lowest in the industry and its continued expansion and network upgrades will enable it to offer a growing number of aggressively-priced products and services designed for every business need.

With its Feature Group D, facilities-based network, Excel Telecommunications is able to originate traffic anywhere in the country -- a key differentiator among many wholesale carriers. The company also currently owns and operates switching facilities in Atlanta, Chicago, Dallas, Denver, Houston, Los Angeles, New York, Orlando, Pittsburgh, Sacramento and Seattle, and has interconnection agreements with more than 300 carriers nationwide.

With strong financial backing and a mission to become the United States’ largest independent provider of wholesale telecommunications services, Excel is developing the business relationships and strategic alliances it takes to help its channel partners become more profitable in the communication services market.

About Excel Telecommunications

The new Excel Telecommunications is a leading provider of long distance, wireless and data services to businesses, resellers and telecommunications dealers throughout the country. Through its acquisition of the assets of VarTec Telecom and its subsidiary VarTec Solutions (formerly known as eMeritus Communications), and by leveraging the former Excel assets and its brand, the company will look to again become a leader of communications technology in the U.S. With revenues exceeding $450 million, and $50 million in cash flow, Excel is well-positioned to execute its plan to be the United States’ largest independent provider of wholesale voice services, which it will achieve by creating business relationships and strategic alliances that generate greater profitability for the company’s partners in the communications services market.

For more information, please contact:
Chad Grosser
cgrosser@excel.com