Pontio Communications Co. Inc., an Austin-based wholesale communications provider, has a $90 million agreement with
Lucent Technologies to launch services in five Texas cities and hire 70 to 90 people.
Company executives say they will announce a bond offering in the first quarter of next year, with a targeted initial public offering the following year.
Founded by Lowell Feldman as Waller Creek Communications in 1995, Pontio reorganized its management in July and will announce new services in a few weeks.
"We are in the middle of beginning to attract capital, but we want to attract institutional capital -- private equity funds as opposed to individuals," says Bill Magness, general counsel and vice president of business development. "The company has been currently capitalized by individuals. The maturity of the company needs to progress."
Company officials would not disclose the individual investors, but the company's total financing arrangements collectively equal one third of the Lucent deal, Magness says.
Pontio is raising additional capital this year for its Texas launch under an investment memorandum and plans a bond offering for first quarter 2000. The company is scheduling an IPO six to seven months after that, possibly in late 2000, he says.
"We're anticipating $25 million in revenues for the year 2000 and up to $68 million in the year 2001," says Pontio Chairman and CEO Rick Weidinger. "Right now we'll probably end '99 with $4 [million] to $5 million."
The company, which has 28 employees, is also planning to have a full staff of 90 to 110 people by the time of its IPO, Weidinger says.
Pontio's initial plan is to be in five cities -- Austin, Dallas, Fort Worth, San Antonio and Houston -- with more than 1,500 fiber miles.
The company expects to be in 29 cities in 16 or 17 states within 24 months. As it expands, Pontio will consider acquiring other companies to build or buy networks in each new city.
As Waller Creek Communications, Pontio originally provided networked voice and data services to more than 1,500 University of Texas college students in dormitory rooms.
"The company built a fiber ring of data and voice services to those students that included high-speed data and voice, local long distance," Weidinger says. "That was originally retail focused. Then the company went under new leadership. With their arrival, we've moved to wholesale and take advantage of the larger networks companies have been able to build."
As part of its reorganization, Feldman, who was Waller Creek's CEO, brought in Weidinger as CEO and Alan Johnson, a former executive with U.S. West and MFS Communications, as chief operating officer. Feldman is now chief regulatory officer at Pontio.
Other Pontio executives who came from Waller Creek are Gary Nekula, chief technical officer with 18 years experience at Southwestern Bell, and Clay Johnson, vice president of finance who lead an independent financial consulting firm in Austin.
