PAETEC to Acquire Allworx

PAETEC Holding Corp. (NASDAQ GS: PAET) announced today that it has signed a definitive agreement to acquire Allworx Corp., a privately held company, in a $25 million all-cash acquisition. Allworx develops, designs, markets, and sells a complete phone and network system. Upon the closing of this acquisition, PAETEC will add a subsidiary with manufacturing, distribution, and software and digital hardware engineering services that are designed to benefit small and medium-sized businesses. The transaction is subject to customary closing conditions and is expected to be completed in October 2007.

With the September 17 announcement that it has signed an agreement to acquire McLeodUSA, PAETEC is expected to enhance its offerings to small and medium-sized business customers. The Allworx portfolio should allow PAETEC to better serve this market. This portfolio includes integrated PBX/Key telephone and network systems and VoIP telephones with a series of advanced communications software options, such as conference calling and call queuing.