Neon Communications Group, Inc. - Additional Proxy Soliciting Materials (definitive) (DEFA14A)
09 Oktober 2007 - 12:59PM
Edgar (US Regulatory)
UNITED
STATES
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SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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SCHEDULE 14A
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Proxy
Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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Filed by the Registrant
x
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Filed by a Party other than the
Registrant
o
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Check the appropriate box:
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o
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Preliminary Proxy Statement
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Confidential, for
Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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x
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Definitive Additional Materials
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o
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Soliciting Material Pursuant to
§240.14a-12
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NEON
Communications Group, Inc.
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(Name
of Registrant as Specified In Its Charter)
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(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment of Filing Fee (Check the
appropriate box):
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x
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No fee required.
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o
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Fee computed on table below per
Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to
which transaction applies:
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(2)
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Aggregate number of securities to
which transaction applies:
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(3)
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Per unit price or other underlying
value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth
the amount on which the filing fee is calculated and state how it was
determined):
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(4)
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Proposed maximum aggregate value of
transaction:
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(5)
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Total fee paid:
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o
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Fee paid previously with preliminary
materials.
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Check box if any part of the fee is
offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule and the date
of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration
Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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The material on the pages that
follow was prepared for use by NEON Communications Group, Inc. (the
"Company") as talking points for industry conferences.
Cautionary Statement Regarding
Forward-Looking Statements
Certain statements in these
materials constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve unknown and uncertain risks, uncertainties and other
factors, which may cause the actual results, performance or achievements of the
Company, or industry results, to be materially different from any future
results, performance, or achievements expressed or implied by such
forward-looking statements or may cause the conditions to the proposed merger
of the Company with a subsidiary of RCN Corporation (the "Merger")
not to be satisfied or cause the Merger not to occur. Forward-looking
statements are subject to numerous assumptions, risks, and uncertainties and
the statements looking forward beyond 2007 are subject to greater uncertainty
because of the increased likelihood of changes in underlying factors and
assumptions. Actual results could differ materially from those anticipated by
the forward-looking statements. Among these factors are the Companys history
of operating losses, factors affecting its future operating results and capital
expenditures, its ability to retain existing customers and attract new
customers, its ability to achieve cost-savings and generate positive cash flow,
the effects of the announcement of the proposed Merger on our business and our
relationships with customers and employees, the results of the review of the
proposed Merger by various regulatory agencies, and any conditions imposed on
the new company in connection with the consummation of the Merger, approval of
the Merger by the Companys stockholders and satisfaction of various other
conditions to the closing of the Merger, and other factors affecting the
Companys business generally. For a general discussion of risks affecting the
Companys business, see Risk Factors in the Companys Annual Report on Form
10-K for the year ended September 30, 2006 and in Part II in the Company's Form
10-Q for the quarter ended June 30, 2007.
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NEON/RCN Talking Points
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1. Key
Messages
The merger provides
a valuable scaling opportunity that will additionally enable the combined
entity to compete in the nations busiest telecommunications corridor
It provides new
geography, new services and capabilities to both entities
Both companies have
similar cultures, focus and service sets which bodes well for the newly formed
company
The teams have long standing working
relationships, which will speed and aid in a seamless integration
Both companies are
focused on strong customer service and flawless execution and plan to maintain
that same high level of customer service post merger
RCN expects to
leverage the strengths and talents of the combined team and to adopt the best
practices of both companies
The combined entity
is financially strong and well positioned to capture future growth
opportunities such as new markets, new products and new customer segments
The deal is expected to close during the fourth quarter of
2007, subject to regulatory approvals as well as certain other closing
conditions
2. RCNs Strategic
Positioning
NEON offers RCN a crucial scaling opportunity in the communication
intensive Northeast and Mid-Atlantic corridor. NEON is a wholesale carrier offering
a comprehensive suite of high bandwidth transport services primarily to carrier
and large enterprise customers from Maine to Virginia. NEONs state-of-the-art
network and facilities are complementary to and/or usefully redundant with RCNs
network. Further, NEON offers RCN tremendous instantaneous commercial expansion
as well as future expansion potential for both residential and commercial
customers. This transaction exemplifies RCNs asset strategy and represents the
next stage in the evolution of RCNs Business Solutions Division:
NEON adds a complementary customer base,
particularly in the carrier market
Meaningful incremental growth potential in
both commercial (wholesale and retail) and residential markets
NEON Adds more than 20% (206 buildings) to RCNs
building list, including 97 Verizon Central Offices
Quadruples the number of collocation buildings
RCN serves
Adds a second Carrier/Commercial grade NOC to
RCN Business Solutions
Unique long-term value proposition
Deal
Facts
RCN will pay up to $5.25 per NEON share for expected total consideration
of approximately $260 million.
Potential purchase price adjustment dependent on NEONs financial
performance.
RCN funding transaction with an additional term loan under recently
completed credit facility - has received binding commitment from Deutsche Bank
- neither the acquisition nor the additional term loan requires additional
consents from existing lenders
Approved by the Boards of Directors of both companies
NEON shareholders approval required RCN shareholders approval is not
required
3.
Financial Plans and Objectives
Subject to finalization upon completion of the
acquisition:
Expect to realize $10 million or more in potential revenue and expense
synergies, primarily driven by SG&A reduction opportunities
4.
Background
The
deal fits:
All the strategic, growth potential and return
characteristics RCN has looked for in a CLEC opportunity fits very well with
RCN Business Solutions strategy
The combination of the two companies helps
fill the void
created by ongoing telecom consolidation
significantly
strengthens RCNs position in the market
1
5. Combined
Company Snapshot (NEON & RCN Business Solutions)
Route
Miles
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~
5,626
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Fiber
Miles
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~315,644
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# of
On-Net Buildings
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More
than 1,100 in total
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Network
Coverage
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Maine
to Virginia and Chicago metro
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Network
Operations Centers
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New
York City NY, Westborough MA and Lanham MD
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# of
Employees
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~278
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# of
Customers
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~1,320
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6.
Benefits
Common Benefits
Similar
service offering including SONET, Ethernet, Wavelength, collocation and custom
networks
Complementary
networks that are largely diverse from one another
The
networks are highly reliable with strong 24/7 operational support
Similar
and complementary technology platforms and operational approach
Similar
corporate cultures of customer-oriented focus and high integrity sales approach
Long
standing working relationship between the companies, which will speed and ease
a successful integration
Similar
utility heritage and networks that leverage unique utility rights of way
RCN Benefits
Immediate scale plus catalyst and resources
for further growth
Immediately provides an expanded network on
which to sell retail commercial services
Brings experienced sales resources with proven
wholesale capabilities and engineering/ operations talent with carrier
expertise
Offers
additional retail sales leverage from NEON Central Offices in Tier 1 and Tier 2
markets
New/expanded
market footprint into Tier 1 and Tier 2 markets - with additional core network
coverage in Portland, Burlington, Boston, Providence, Hartford, Albany, NYC,
Newark, Philadelphia, Baltimore and Washington D.C.; as well as growth
potential to surrounding areas
A fiber network leveraging utility and gas
pipeline rights of way, largely diverse from RCNs fiber network
Diverse major routes from Maine to Virginia
for disaster recovery and redundancy
Local and long haul communication solutions
for wholesale carrier and enterprise customers
NEON Benefits
Adds to the current suite of NEON services,
including
:
Network
Services
Ethernet (EPL, EVPL, E-LAN)1 Mbps to 1 Gbps
(This would be an enhancement to the NEON offering)
IP Transit up to OC192
Construction Services
SONET (similar offering to NEON)
Managed
Data Services
Colocation
Shared Web Hosting
Managed Dedicated Servers
Add new locations, which NEON can leverage:
900+
Buildings On-Net
Deeper
capillarity in New York City & DC
Adds the Chicago metro market
RBS
has significant traction in the enterprise segment and an deep understanding of
their needs and requirements
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