Pivotal Takes Over at Global Capacity

Private equity firm Pivotal Group announced yesterday that it has purchased telecommunication logistics company Global Capacity.  Global Capacity filed for chapter 11 bankruptcy back in June, and Pivotal has now taken control by paying $65M of the company’s debt.  They are finalizing the plan to emerge from bankruptcy, and a hearing has been scheduled – not that there is any doubt since Pivotal owns 100% of the debt now.  So now the question shifts to what exactly Pivotal has in mind.

Global Capacity maintains a proprietary platform tracking the world’s fiber routes and the costs for using each piece, enabling them to calculate the most cost effective route between two points for their clients.  However, they didn’t make much headway with it the first time, so I’m curious what the plan is this time.  Well, the official line is that it will let them ‘benefit from an explosion in demand for global optical fiber to distribute computer and smartphone content’ – but that’s the why, not the how.

Pivotal has been quiet lately, not dipping into the metro fiber M&A during 2010 that I know of.  But they’ve sniffed around fiber before, they tried to buy Pacific Crossing back in 2003 but that deal got bogged down in some sort of landing station ownership mess in Japan and fell apart.  I wonder what they see in the logistics side that they don’t see in the fiber itself.

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Categories: Mergers and Acquisitions