Capital Growth Systems, Inc.(fka CGSYQ)

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Pivotal Group Agrees to Pay 29.5 Million for Global Capacity

November 16 2010
29.5 Million for Global Capacity

Pivotal Global Capacity LLC signed a letter of intent to acquire substantially all assets of Global Capacity Holdco, LLC from Capital Growth Systems, Inc. (OTCBB: CGSY.Q) for $29.5 million in cash and debt on November 8, 2010.

Under the terms of agreement, Pivotal would pay $25.5 million in cash and provide a $4 million three-year note to junior debenture holders. The unsecured debt would carry pay-in-kind interest of 7.5% and be subordinated to Pivotal receiving a 10% internal rate of return on its investment.

Global Capacity would keep $1.5 million of the sale proceeds on its balance sheet after sale closing. Pivot also acquired Global Capacity's convertible debentures and debtor-in-possession financing of $65 million. Post closing, Global Capacity will emerge from bankruptcy as a privately held company with no debt and positive monthly cash flow from operations.

Pivotal Global Capacity LLC signed an asset purchase agreement to acquire substantially all assets of Global Capacity Holdco, LLC from Capital Growth Systems, Inc. (OTCBB: CGSY.Q) for $28.6 million in cash on January 12, 2011.

Pivotal will also assume the liabilities of Global Capacity Holdco. The transaction is subject to regulatory approvals. United States Bankruptcy Court for the District of Delaware approved the transaction on January 27, 2011. The completion of the process is expected by April 30, 2011.