Focal Communications –

CHICAGO – Focal Communications Corp., a provider of data and voice communications to large corporate customers, held an initial public offering July 28. The company offered 9.95 million shares at $13 apiece, above its $10 to $12 filing range.

Salomon Smith Barney, Donaldson, Lufkin & Jenrette, Morgan Stanley Dean Witter, Credit Suisse First Boston and DLJdirect Inc. underwrote the IPO, which left 59.07 million shares outstanding.

There were no selling shareholders. Madison Dearborn Capital Partners, Frontenac VI and Battery Ventures III are venture backers.

Focal provides data, voice and dual-location services to large, communications-intensive users, such as large corporations, Internet service providers and value-added resellers. The company began operations in May 1996 in Chicago, and has expanded to 13 cities, including Boston, Elk Grove Village, Ill., Los Angeles, New York, Northern New Jersey, Northern Virginia, Orange County, Philadelphia and Washington, D.C.

The $119.3 million earned in the offering will be used for general corporate purposes, including potential acquisitions. The company was profitable for the first time in the first three months of this year, earning $284,854. Focal lost $8.0 million in 1998.

Richard Frisbie, a managing partner of Battery, joined the company’s board of directors in November 1996, alongside James Crwford III, a general partner of Frontenac Co., Paul Finnegan, a managing director of Madison Dearborn, and James Perry, a vice president of Madison Dearborn.

Focal Communications – Selected Financial

(in thousands, except per share data)

May 13, 1996 (inception) Three Months Ended

through December 31, Year Ended December 31, March 31,

1996 1997 1998 1998 1999

Revenue – 4,024 43,532 5,102 26,004

Net income (loss) -514 -2,970 -7,969 -341 285

Net income (loss) per share -0.06 -0.07 -0.18 -0.01 0.01