After struggling for weeks to find a way to stay in business, overbuilder Digital Access is closing the doors.
Digital Access aimed its $450 million in equity bankroll at wiring four mid-size markets: Nashville, Milwaukee, Indianapolis, and Kansas City, Mo. The company had expected to borrow another $900 million.
But the frozen lending markets prompted Digital Access pull out of everything but Nashville as of two weeks ago. Chairman Joe CeCe said that with no opening of the debt markets in sight, his equity investors decided that even if the Nashville build were successful, they couldn't get the 30%-plus returns an eqity they demand.
"We certainly had the money to build Nashville," CeCe said. "Without the leverage you can't get the returns that private equity guys need when they start these businesses."
- John Higgins