SEC Company Response from CBEYOND COMMUNICATIONS INC (CIK 0001205727) — Oct 27, 2005
CBEYOND COMMUNICATIONS INC (CIK 0001205727)
Date: Oct. 27, 2005 · CIK: 0001205727 · Accession: 0001193125-05-210124
AI Filing Summary & Sentiment
File numbers found in text: 333-124971
Letter
VIA EDGAR CORRESPONDENCE Division of Corporation Finance Securities and Exchange Commission Re: Cbeyond Communications, Inc. Registration Statement on Form S-1 Filed May 16, 2005, as amended to date File No. 333-124971
Dear Mr. Spirgel:
In connection with the offering (the “Offering”) by Cbeyond Communications, Inc. (the “Company”) pursuant to the above-referenced Registration Statement, the underwriters of the Offering have informed us that, due to present market conditions, it would be advisable to reduce the price range of the Offering from $16.00 to $18.00 per share, as stated in the preliminary prospectus, to $13.00 to $14.00 per share and to increase the number of shares being offered by the Company in the Offering from 6,058,823 shares, as stated in the preliminary prospectus, to 6,104,575 shares.
The reduction of the initial public offering price will have the effect of decreasing the per share dilution to investors who purchase shares in the Offering. In particular, based on the midpoint of the original and revised price ranges for the Offering, the dilution in the net tangible book value to investors who purchase shares in the Offering will decrease from $13.00 per share to $10.28 per share.
The changes to the Offering will not affect the Company’s leverage, use of proceeds or anticipated revenues. Based on the midpoint of the revised price range for the Offering, the net proceeds will be sufficient to repay all outstanding principal and accrued interest under the Company’s credit facility, which was $62.9 million as of June 30, 2005, and terminate the facility. Any remaining balance of net proceeds from the offering will be applied to the Company’s general corporate purposes, which include the Company’s intention to expand into two additional markets by the end of 2009 based on the Company’s debt-free status after giving effect to the offering. Because the changes to the Offering do not affect the Company’s continued ability to repay and terminate its existing credit facility, the Company believes, and it has confirmed that the underwriters believe, that the changes to the preliminary prospectus included in Amendment No. 8 do not represent a material adverse change to the disclosure contained in the preliminary prospectus. The Company respectfully submits that, insofar as the
October 27, 2005
Page 2
Offering would generate sufficient net proceeds to repay and terminate its existing credit facility, a decrease in the size of the Offering will not represent a material adverse change to the disclosure contained in the preliminary prospectus.
The underwriters have confirmed to the Company that they will orally inform their accounts of these changes to the Offering before the accounts are asked to commit to purchase. In particular, the underwriters have confirmed that they will contact their accounts and discuss with them the reduced offering price prior to the confirmation of purchase orders. In addition, the underwriters would propose to circulate electronically the revised preliminary prospectus to each of the accounts with whom the underwriters are currently discussing the Offering and to whom the underwriters have previously provided copies of the prior version of the preliminary prospectus. The underwriters have further advised that all of their confirmations of purchase orders will be accompanied by a final prospectus that has been amended to reflect the price and size of the Offering.
As a result, the Company confirms its request to be declared effective today.
If you have any questions or comments with regard hereto, please contact Christopher L. Kaufman at (650) 463-2606 or the undersigned at (202) 637-2165.
Very truly yours,
/s/ Joel H. Trotter
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SEC correspondence
555 Eleventh Street, N.W., Suite 1000
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www.lw.com
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Washington, D.C.
October 27, 2005
VIA EDGAR CORRESPONDENCE
Larry Spirgel
Assistant Director
Division of Corporation Finance
Securities and Exchange Commission
100 F Street N.E.
Washington, D.C. 20549
Re:
Cbeyond Communications, Inc.
Registration
Statement on Form S-1
Filed May 16, 2005, as amended to date
File No. 333-124971
Dear Mr. Spirgel:
In connection with the offering (the “Offering”) by Cbeyond Communications, Inc. (the “Company”) pursuant to the above-referenced
Registration Statement, the underwriters of the Offering have informed us that, due to present market conditions, it would be advisable to reduce the price range of the Offering from $16.00 to $18.00 per share, as stated in the preliminary
prospectus, to $13.00 to $14.00 per share and to increase the number of shares being offered by the Company in the Offering from 6,058,823 shares, as stated in the preliminary prospectus, to 6,104,575 shares.
The reduction of the initial public offering price will have the effect of
decreasing the per share dilution to investors who purchase shares in the Offering. In particular, based on the midpoint of the original and revised price ranges for the Offering, the dilution in the net tangible book value to investors who purchase
shares in the Offering will decrease from $13.00 per share to $10.28 per share.
The changes to the Offering will not affect the Company’s leverage, use of proceeds or anticipated revenues. Based on the midpoint of the revised price range for the Offering, the net proceeds will be sufficient
to repay all outstanding principal and accrued interest under the Company’s credit facility, which was $62.9 million as of June 30, 2005, and terminate the facility. Any remaining balance of net proceeds from the offering will be applied
to the Company’s general corporate purposes, which include the Company’s intention to expand into two additional markets by the end of 2009 based on the Company’s debt-free status after giving effect to the offering. Because the
changes to the Offering do not affect the Company’s continued ability to repay and terminate its existing credit facility, the Company believes, and it has confirmed that the underwriters believe, that the changes to the preliminary prospectus
included in Amendment No. 8 do not represent a material adverse change to the disclosure contained in the preliminary prospectus. The Company respectfully submits that, insofar as the
October 27, 2005
Page 2
Offering would generate sufficient net proceeds to repay and terminate its existing credit facility, a decrease in the size of the Offering will not represent a material adverse change to the disclosure contained in
the preliminary prospectus.
The underwriters have confirmed to
the Company that they will orally inform their accounts of these changes to the Offering before the accounts are asked to commit to purchase. In particular, the underwriters have confirmed that they will contact their accounts and discuss with them
the reduced offering price prior to the confirmation of purchase orders. In addition, the underwriters would propose to circulate electronically the revised preliminary prospectus to each of the accounts with whom the underwriters are currently
discussing the Offering and to whom the underwriters have previously provided copies of the prior version of the preliminary prospectus. The underwriters have further advised that all of their confirmations of purchase orders will be accompanied by
a final prospectus that has been amended to reflect the price and size of the Offering.
As a result, the Company confirms its request to be declared effective today.
If you have any questions or comments with regard hereto, please contact Christopher L. Kaufman at (650) 463-2606 or the undersigned at
(202) 637-2165.
Very truly yours,
/s/ Joel H. Trotter
Joel H. Trotter
of LATHAM & WATKINS LLP
cc:
James F. Geiger
J. Robert Fugate
Cbeyond Communications, Inc.
Michael J. Murdy
Ernst & Young LLP
Christopher L. Kaufman
Latham & Watkins LLP
John T. Gaffney
Cravath, Swaine & Moore LLP