Exhibit 99.1
Contact:
Christian Munson Jim Huseby
Crawford Public Relations Vice President - Investor Relations
703-318-5460 ext. 205 KMC Telecom
[email protected] 908-470-2149
[email protected]
KMC TELECOM RAISES $182 MILLION IN PRIVATE EQUITY
COMPANY WILL APPOINT ALEXANDER P. COLEMAN, INVESTMENT PARTNER AT
DRESDNER KLEINWORT BENSON PRIVATE EQUITY PARTNERS, TO ITS BOARD OF DIRECTORS
BEDMINSTER, NJ, JULY 12, 2000 - KMC Telecom, a facilities-based competitive
local exchange carrier, today announced it has raised $182 million of private
equity from Lucent Technologies, Dresdner Kleinwort Benson Private Equity
Partners, CIT Lending Services, Nassau Capital Partners and Hal Kamine, the
founder of KMC Telecom.
The transaction represents KMC's largest sale of equity to date. The
investor group purchased Series G Preferred Stock in KMC Telecom Holdings Inc.,
which carries a seven percent cumulative dividend, and automatically converts to
KMC Telecom common stock upon a public offering meeting certain agreed
parameters.
KMC Telecom will use the new capital to further fund its existing business
plan of building and operating robust fiber optic networks in 39 U.S. cities and
to advance the company's deployment of a nationwide data footprint.
"We are gratified that this group of investors has shown its additional
support," said Bill Lenahan, Chief Executive Officer of KMC Telecom. "Each of
these investors has already made major financial commitments to KMC, and their
further support represents the completion of our initial step towards bringing
significant equity capital into KMC."
As part of the transaction, KMC Telecom will also appoint Alex Coleman,
Investment Partner at Dresdner Kleinwort Benson Private Equity Partners, to its
Board of Directors. Dresdner Kleinwort Benson Private Equity Partners is an
affiliate of Dresdner Bank AG, one of the world's largest banks with
approximately $453 billion in assets and $266 billion in funds under management
as of March 31, 2000. Coleman has been involved in management buyouts,
cross-border equity transactions, expansion financings and venture capital for
more than 10 years. He serves as a board member for several companies, including
Tritel Inc., a publicly traded AT&T Wireless affiliate. Coleman's financial
expertise will benefit KMC's capital requirements as it pursues its growth
strategy.
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KMC TELECOM RAISES $182 MILLION IN PRIVATE EQUITY - Page 2
"KMC Telecom is playing a key role in the development of an advanced
telecommunications infrastructure in smaller markets across the country," said
Coleman. "Our investment reflects our confidence in the company's ability to
meet its business objectives and deliver advanced services to overlooked
markets. I am excited to serve as a director and assist the company in achieving
its business objectives."
"As KMC Telecom's initial institutional investor, Nassau Capital has a
long-standing relationship with the company dating back to 1995, and is quite
pleased with how the company has continued to evolve," said John Quigley, Senior
Managing Director at Nassau Capital. "We strongly support KMC Telecom's
management team and the company's strategy of owning and operating fiber optic
networks in Tier III cities."
KMC Telecom Holdings Inc., a privately owned facilities-based competitive
local exchange carrier, operates local fiber optic networks in 35 markets
throughout the Mid-Atlantic, Midwest and South. Founded in 1995, the company
offers customers an attractive alternative in local telephone and data
communication services. For further information, visit www.kmctelecom.com.
CERTAIN MATTERS DISCUSSED IN THIS RELEASE ARE FORWARD-LOOKING STATEMENTS
THAT INVOLVE RISKS AND UNCERTAINTIES, INCLUDING CONSTRUCTION RISKS AND OTHER
RISKS DETAILED FROM TIME TO TIME IN KMC'S REPORTS FILED WITH THE SECURITIES
EXCHANGE COMMISSION, INCLUDING THOSE CONTAINED IN KMC'S FORM 10-K FOR THE FISCAL
YEAR ENDED DECEMBER 31, 1999. AS A RESULT, ACTUAL RESULTS, EVENTS OR CONDITIONS,
FINANCIAL OR OTHERWISE, CAN DIFFER MATERIALLY FROM THE RESULTS REFERRED TO IN
THOSE STATEMENTS. KMC UNDERTAKES NO DUTY TO UPDATE SUCH FORWARD-LOOKING
STATEMENTS.
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