Kansas City, Mo Kansas City, Mo.-based Birch Telecom Inc. and Addison, Texas-based Ionex Telecom Inc. reported Wednesday that they will merge to create a larger company that will compete with SBC Communications Inc.
Terms of the deal were not disclosed. But a group of investors that includes the major backers of Ionex will provide more than $40 million in funding.
The new company, which will adopt the Birch Telecom name, will operate on Ionex's network. It will be based in Kansas City, Mo., and led by David Scott, CEO of Birch.
The deal, which faces regulatory approval, is expected to be completed within three months, Scott said.
The combined company will serve more than 500,000 telephone lines, mostly in Texas, Oklahoma, Missouri and Kansas. It also will operate in Alabama, Georgia, Mississippi, North Carolina, South Carolina and Tennessee.