Private equity firm Warburg Pincus will invest at least $245 million to obtain a substantial equity interest in Integra Telecom Inc.

The proceeds from the transaction will be paid to existing Integra investors in exchange for outstanding shares, Integra said. Integra Telecom will continue to operate as a privately held company and will not raise any primary equity in this transaction.

Integra said in March that it would acquire Eschelon Telecom Inc. for $710. The Warburg Pincus transaction is separate from that purchase and not required to complete it. The Eschelon acquisition is expected to close on Aug. 31.

Deutsche Bank Securities acted as exclusive mergers and acquisitions adviser to Integra, and Morgan Stanley acted as the exclusive merger and acquisitions adviser to Warburg Pincus.

The transaction is subject to a customary regulatory and other approvals and is expected to close in the fall.

Integra Telecom Inc. www.integratelecom.com
Warburg Pincus www.warburgpincus.com